DENVER, CO--(Marketwire - Jul 21, 2011) - Guaranty Bancorp (
-- Quarterly net income increased to $1.4 million (excluding non-cash
preferred stock dividends)
-- All asset quality indicators improved, including a $25.6 million
decrease in nonperforming assets
-- Non-interest bearing deposits continue to grow and represent 31% of
total deposits at June 30, 2011
-- Pass-rated loans increased by $7.7 million in the second quarter
-- Strong regulatory risk-based capital ratios further improved during the
quarter
Guaranty Bancorp (
Paul W. Taylor, Guaranty Bancorp's President and Chief Executive Officer, stated, "I am proud to announce our best quarter in the past three very difficult years. In addition to quarterly net income of $1.4 million, we improved all of our asset quality measures, further increased our already strong risk-based capital ratios, continued to grow the number of new deposit customers and generated new loan business in the communities we serve. We have very high expectations for the future performance of this organization. Although we are not yet where we want to be with respect to performance, thanks to the hard work by many dedicated employees, we continue to make significant progress toward our goals."
Mr. Taylor continued, "Although our total loans declined during the quarter due to planned reductions in problem loans, this has been our highest quarter of new loan bookings in several years. Specifically, we booked $71.4 million of new loans with over 40 different businesses during the quarter as well as extending $22.8 million of credit on existing loans. Included in these totals are $9.1 million of SBA loans for which we are a preferred lender. Further, our pipeline of potential new loans continues to grow. Finally, as announced yesterday, I am excited to have Michael Hobbs join us on July 27, 2011, as President of our wholly-owned subsidiary, Guaranty Bank and Trust Company. Mr. Hobbs will be a great addition to our team."
For the six-months ended June 30, 2011, net income was $1.9 million before preferred stock dividends compared to a net loss of $6.2 million before preferred stock dividends for the same period in 2010. After giving effect to the preferred stock dividends, the loss per basic and diluted common share for the first six months of 2011 was approximately $0.02 per share compared to a loss per basic and diluted common share of $0.17 for the same period in 2010. The improvement in net income is due mostly to a $9.4 million reduction in provision for loan losses and a $6.4 million reduction in noninterest expense primarily related to other real estate owned. These significant income improvements were partially offset by a $3.3 million decrease in net interest income for the year-to-date period in 2011 as compared to 2010 due mostly to lower earning assets in 2011 as well as a $0.5 million decrease in noninterest income due primarily to a net decrease in gains on the sale of assets.
Key Financial Measures
Income Statement
Quarter Ended Six Months Ended
------------------------------ --------------------
June 30, March 31, June 30, June 30, June 30,
2011 2011 2010 2011 2010
--------- --------- --------- --------- --------
Income (loss) before
income taxes $ 1,409 $ 514 $ (6,961) $ 1,923 $(10,033)
Net income (loss)
before preferred
stock dividends 1,409 514 (4,354) 1,923 (6,199)
Preferred stock
dividends 1,518 1,486 1,390 3,004 2,750
Loss per common
share after giving
effect to preferred
stock dividend $ 0.00 $ (0.02) $ (0.11) $ (0.02) $ (0.17)
Return on average
assets 0.32% 0.11% (0.87)% 0.22% (0.61)%
Net interest margin 3.56% 3.42% 3.47 % 3.49% 3.48 %
Balance Sheet
June 30, December 31, June 30,
2011 2010 % Change 2010 % Change
--------- ------------ -------- --------- --------
(Dollars in thousands, except per share amounts)
Cash and cash
equivalents $ 134,896 $ 141,465 (4.6)% $ 184,701 (27.0)%
Total investments 408,806 418,668 (2.4)% 312,293 30.9 %
Total loans, net
of unearned
discount 1,091,132 1,204,580 (9.4)% 1,374,208 (20.6)%
Loans held for
sale 14,200 14,200 0.0 % 1,150 1,134.8 %
Allowance for
loan losses (38,855) (47,069) (17.5)% (46,866) (17.1)%
Total assets 1,747,060 1,870,052 (6.6)% 1,983,798 (11.9)%
Average assets,
quarter-to-date 1,767,540 1,940,513 (8.9)% 1,999,527 (11.6)%
Total deposits 1,346,183 1,462,351 (7.9)% 1,544,271 (12.8)%
Book value per
common share 1.81 1.76 2.8 % 2.38 (23.9)%
Tangible book
value per common
share 1.59 1.50 6.0 % 2.06 (22.8)%
Tangible book
value per common
share
(after giving
effect to
conversion of
preferred
stock) 1.68 1.62 3.7 % 1.96 (14.3)%
Book value of
preferred stock 67,806 64,818 4.6 % 61,961 9.4 %
Liquidation value
of preferred
stock 69,013 66,025 4.5 % 63,168 9.3 %
Equity ratio -
GAAP 9.49% 8.57% 10.7 % 9.53% (0.4)%
Tangible equity
ratio 8.86% 7.88% 12.4 % 8.76% 1.1 %
Total risk-based
capital ratio 16.22% 14.99% 8.2 % 14.80% 9.6 %
Net Interest Income and Margin
Quarter Ended Six Months Ended
-------------------------------- --------------------
June 30, March 31, June 30, June 30, June 30,
2011 2011 2010 2011 2010
--------- ---------- --------- --------- ---------
(Dollars in thousands)
Net interest income $ 14,747 $ 14,710 $ 16,133 $ 29,457 $ 32,765
Interest rate
spread 3.18% 3.05% 3.09% 3.11% 3.10%
Net interest margin 3.56% 3.42% 3.47% 3.49% 3.48%
Net interest
margin, fully tax
equivalent 3.62% 3.49% 3.55% 3.55% 3.56%
Second quarter 2011 net interest income of $14.7 million remained level
compared to the first quarter 2011, and decreased by $1.4 million from the
second quarter 2010. The Company's net interest margin of 3.56% for the
second quarter 2011 reflected an increase of 14 basis points from the first
quarter 2011 and an increase of 9 basis points from the second quarter
2010.
Although net interest income remained relatively flat for the second quarter 2011 compared to the first quarter 2011, interest income decreased $0.7 million, offset by a $0.7 million decline in interest expense. The $0.7 million decrease in interest income in the second quarter 2011 as compared to the first quarter 2011 is primarily attributable to a $0.5 million decrease in interest income on loans as a result of a $72.4 million reduction in average balances quarter over quarter. The remaining decrease in interest income is a result of a reduction in our average security holdings during the quarter. Offsetting the decrease in interest income was a $0.7 million decline in interest expense. Specifically, time deposit interest expense decreased by $0.7 million due to a $104.3 million decrease in average time deposits, mostly higher cost, brokered time deposits. The Company anticipates further reductions in time deposit interest through the remainder of 2011 as a result of scheduled maturities of brokered deposits of $69.3 million with a weighted average cost of 3.43%, including $40.1 million in the early third quarter 2011.
Net interest income decreased by $1.4 million in the second quarter 2011, as compared to the same quarter in 2010, due primarily to an unfavorable $2.0 million volume variance, partially offset by a $0.6 million favorable rate variance. The unfavorable volume variance for the second quarter 2011 as compared to the same quarter in 2010 is due mostly to the $302.0 million decrease in average loan balances, offset by a $98.6 million increase in the average balance of all other earning assets, particularly taxable investments, and a $305.0 million decrease in average time deposits. The favorable rate variance for the second quarter 2011 as compared to the same quarter in 2010 is primarily due to a 52 basis point decrease in the cost of deposits partially offset by a 24 basis point decrease in the yield on earning assets. Overall net interest margin improved by nine basis points to 3.56% in the second quarter 2011 as compared to 3.47% in the same quarter in 2010.
Net interest income for the first six months of 2011 decreased by $3.3 million from $32.8 million for the six months ended June 2010 to $29.5 million for the six months ended June 2011. The $3.3 million decline consists of a $3.5 million unfavorable volume variance, partially offset by a $0.2 million favorable rate variance. The unfavorable volume variance for the first six months of 2011 as compared to the same period in 2010 is due mostly to a $302.7 million decline in average loan balances partially offset by a $107.9 million increase in the average balance of all other earning assets and a $283.2 million decrease in time deposits. The $0.2 million favorable rate variance for the first six months of 2011 as compared to the same period in 2010 is due to the one basis point increase in net interest margin.
Noninterest Income
The following table presents noninterest income as of the dates indicated:
Quarter Ended Six Months Ended
------------------------------- ----------------------
June 30, March 31, June 30, June 30, June 30,
2011 2011 2010 2011 2010
--------- ---------- --------- ---------- -----------
(In thousands)
Noninterest income:
Customer service
and other fees $ 2,386 $ 2,314 $ 2,254 $ 4,700 $ 4,468
Gain (loss) on sale
of securities (312) 714 1 402 15
Gain on sale of
loans - - 1,196 - 1,196
Other 262 252 274 514 468
--------- ---------- ---------- ---------- ----------
Total noninterest
income $ 2,336 $ 3,280 $ 3,725 $ 5,616 $ 6,147
========= ========== ========== ========== ==========
The $0.9 million decrease in noninterest income in the second quarter 2011
as compared to the first quarter 2011 reflects a $1.0 million swing in
gain/loss on sale of securities from the $0.7 million gain recognized in
the first quarter to the $0.3 million loss recognized in the second
quarter. The sale of securities was done primarily to reduce duration
within the investment portfolio. During the quarter, the average life of
our bond portfolio was reduced by approximately seven months. Excluding
the $1.2 million gain on sale of loans recognized in the second quarter
2010, noninterest income remained relatively flat in the second quarter
2011 compared to the same quarter in 2010.
Excluding the $1.2 million gain on sale of loans recognized in June 2010, noninterest income for the six months ended June 30, 2011 increased by $0.7 million compared to the same period in 2010. This increase is the result of a $0.4 million increase in net gains on sale of securities. Additionally, customer service and other fees increased by $0.2 million year over year, primarily as a result of higher overdraft and interchange fee income.
Noninterest Expense
The following table presents noninterest expense as of the dates indicated:
Quarter Ended Six Months Ended
-------------------------------- ---------------------
June 30, March 31, June 30, June 30, June 30,
2011 2011 2010 2011 2010
---------- ---------- ---------- ---------- ----------
(In thousands)
Noninterest expense:
Salaries and
employee benefits $ 6,320 $ 6,615 $ 6,472 $ 12,935 $ 13,035
Occupancy expense 1,792 1,883 1,836 3,675 3,726
Furniture and
equipment 913 894 967 1,807 1,943
Amortization of
intangible assets 1,028 1,028 1,300 2,056 2,600
Other real estate
owned 466 763 3,115 1,229 5,864
Insurance and
assessment 966 1,225 1,825 2,191 3,637
Professional fees 914 908 739 1,822 1,616
Other general and
administrative 2,275 2,160 2,165 4,435 4,124
---------- ---------- ---------- ---------- ----------
Total noninterest
expense $ 14,674 $ 15,476 $ 18,419 $ 30,150 $ 36,545
========== ========== ========== ========== ==========
The $0.8 million decrease in noninterest expense in the second quarter 2011
as compared to the first quarter 2011 is due mostly to a $0.3 million
decrease in expenses related to other real estate owned, a decrease of $0.3
million in salaries and employee benefit expenses and a $0.3 million
reduction in insurance and assessment expense. The decrease in salaries
and employee benefit expenses is due to a $0.2 million decrease in payroll
taxes and a decrease in average full-time employees during the quarter.
The decrease in other real estate owned expense is primarily due to a
reduction in net write-downs on other real estate owned properties
resulting from valuation adjustments and sales. The decrease in insurance
and assessment expense is a result of the change in the FDIC insurance
assessment rules as of April 1, 2011 due to the implementation of new rules
mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act.
We expect to continue to realize the benefits of reduced insurance
assessment throughout the remainder of 2011.
Noninterest expense for the six months ended June 30, 2011 decreased by $6.4 million compared to the same period in 2010 primarily due to a $4.6 million decrease in expenses associated with other real estate owned, a $1.4 million decrease in insurance and assessment expenses and a $0.5 million decrease in amortization of intangible assets. The decrease in other real estate owned expense for the year-to-date period in 2011 as compared to the same period in 2010 is mostly due to a reduction in net write-downs on other real estate owned properties resulting from valuation adjustments and sales. The decrease in insurance and assessment expense for the first six months of 2011 as compared to the same period in 2010 is due primarily to a favorable change in our risk classification in the third quarter 2010 as well as the change in the FDIC insurance assessment rules on April 1, 2011 as discussed above.
Preferred Stock Dividend
Effective May 15, 2011, a non-cash preferred stock dividend was paid in the form of additional shares of Series A convertible preferred stock to holders of Series A convertible preferred stock in the amount of $1.5 million.
Balance Sheet
June 30, December 31, June 30,
2011 2010 % Change 2010 % Change
----------- ------------ -------- ----------- --------
(Dollars in thousands)
Total assets $ 1,747,060 $ 1,870,052 (6.6)% $ 1,983,798 (11.9)%
Average
assets,
quarter-to-
date 1,767,540 1,940,513 (8.9)% 1,999,527 (11.6)%
Loans, net of
unearned
discount 1,091,132 1,204,580 (9.4)% 1,374,208 (20.6)%
Total
deposits 1,346,183 1,462,351 (7.9)% 1,544,271 (12.8)%
Equity ratio
- GAAP 9.49% 8.57% 10.7 % 9.53% (0.4)%
Tangible
equity ratio 8.86% 7.88% 12.4 % 8.76% 1.1 %
At June 30, 2011, the Company had total assets of $1.7 billion, which
represented a $123.0 million decline as compared to December 31, 2010 and a
$236.7 million decline as compared to June 30, 2010. The decline in assets
from December 31, 2010 is primarily due to a $113.4 million decrease in
loans, net of unearned discount. The loan decline was due mostly to a $91.7
million decrease in commercial loans and a $19.7 million decrease in real
estate loans.
In the second quarter 2011, our classified loans declined by $25.5 million with another decrease of $17.2 million in loans internally classified as special mention or watch. In addition to this $42.7 million decline in classified and watch rated loans, other real estate owned decreased by $5.3 million in the second quarter 2011. These declines were the result of the successful execution of our strategic plan to reduce problem assets by our special assets group.
Pass-rated loans consist of all loans not otherwise adversely classified or included on our internal watch list. As described above, loans that are adversely classified or on our internal watch list decreased by $42.7 million in the second quarter. While total loans declined by $35.0 million in the second quarter 2011, our pass-rated loans increased by $7.7 million during the second quarter. In addition, our pipeline of new loan opportunities continues to grow each month.
The following table sets forth the amounts of our loans outstanding
(excluding loans held for sale) at the dates indicated:
June 30, March 31, December 31, June 30,
2011 2011 2010 2010
----------- ----------- ------------ -----------
(In thousands)
Loans on real estate:
Residential and
commercial $ 675,283 $ 659,018 $ 680,895 $ 754,019
Construction 45,421 50,539 57,351 83,389
Equity lines of
credit 48,129 49,399 50,289 51,221
Commercial loans 258,990 305,627 350,725 411,605
Agricultural loans 14,193 12,582 14,413 17,968
Lease financing 3,143 3,143 3,143 4,014
Installment loans to
individuals 25,912 26,942 28,582 31,936
Overdrafts 869 835 565 668
SBA and other 20,736 19,543 20,443 21,607
----------- ----------- ------------ -----------
1,092,676 1,127,628 1,206,406 1,376,427
Unearned discount (1,544) (1,545) (1,826) (2,219)
----------- ----------- ------------ -----------
Loans, net of unearned
discount $ 1,091,132 $ 1,126,083 $ 1,204,580 $ 1,374,208
=========== =========== ============ ===========
Since June 30, 2010, the ratio of construction, land and land development
loans to capital has fallen by 28 percentage points to 73% at June 30,
2011. Similarly, the ratio of commercial real estate loans to capital has
fallen by 56 percentage points to 259% at June 30, 2011. These ratios are
below the regulatory commercial real estate concentration guidelines of
100% for land and construction loans and 300% for all investor real estate
loans, respectively.
The following table sets forth the amounts of our deposits outstanding at
the dates indicated:
June 30, March 31, December 31, June 30,
2011 2011 2010 2010
----------- ----------- ------------- -----------
(In thousands)
Noninterest-bearing
deposits $ 419,731 $ 419,335 $ 374,500 $ 338,169
Interest-bearing demand 183,287 184,305 178,042 171,721
Money market 343,920 357,922 357,036 323,331
Savings 86,139 84,501 79,100 75,338
Time 313,106 392,257 473,673 635,712
----------- ----------- ------------- -----------
Total deposits $ 1,346,183 $ 1,438,320 $ 1,462,351 $ 1,544,271
=========== =========== ============= ===========
Noninterest-bearing deposits as a percentage of total deposits increased to
31.2% at June 30, 2011, as compared to 25.6% at December 31, 2010 and 21.9%
at June 30, 2010.
Non-maturity deposits at June 30, 2011 increased by $44.4 million as compared to December 31, 2010 and increased by $124.5 million as compared to June 30, 2010. The increase in non-maturity deposits is primarily attributable to the continued success of our strategic deposit gathering campaign. In addition to the $44.4 million increase in balances of non-maturity deposits in 2011, the total number of customer accounts increased by over 1% during the same period.
Time deposits continue to decrease primarily as a result of management's efforts to reduce the overall level of higher cost time deposits, particularly brokered and internet deposits. Total brokered deposits at June 30, 2011 were $80.2 million as compared to $179.9 million at December 31, 2010 and $255.5 million at June 30, 2010. Brokered deposits represent 5.9% of total deposits at June 30, 2011 as compared to 12.2% at December 31, 2010 and 16.3% at June 30, 2010. In addition to this $175.3 million decline in brokered deposits over the past twelve months, we also experienced a $70.3 million decline in internet time deposits over the same time period. The remaining decline in time deposits is primarily related to the non-renewal of other higher cost certificates of deposits. Management monitors time deposit maturities and renewals on a daily basis and will raise rates on local time deposits if necessary to grow such deposits.
Borrowings were $163.2 million at June 30, 2011 as compared to $163.2 million at December 31, 2010 and $164.3 million at June 30, 2010. The entire balance of borrowings at each balance sheet date consists of term advances with the Federal Home Loan Bank.
Regulatory Capital Ratios
All of the regulatory capital ratios are above the highest regulatory capital threshold of "well-capitalized" at June 30, 2011. The Company's and the subsidiary bank's actual capital ratios for June 30, 2011 and December 31, 2010 are presented in the table below:
Minimum
Requirement
Ratio at Ratio at Minimum for "Well
June 30, December 31, Capital Capitalized"
2011 2010 Requirement Institution
--------- ------------ ------------ ------------
Total Risk-Based
Capital Ratio:
Consolidated 16.22% 14.99% 8.00% N/A
Guaranty Bank and
Trust Company 15.39% 14.07% 8.00% 10.00%
Tier 1 Risk-Based
Capital Ratio:
Consolidated 9.00% 8.57% 4.00% N/A
Guaranty Bank and
Trust Company 14.12% 12.80% 4.00% 6.00%
Leverage Ratio:
Consolidated 6.71% 6.25% 4.00% N/A
Guaranty Bank and
Trust Company 10.53% 9.33% 4.00% 5.00%
Generally, the allowance for loan losses is included in total capital for
regulatory purposes; however, it is limited to 1.25% of total risk-weighted
assets. At June 30, 2011, approximately $22.4 million of the subsidiary
bank's allowance for loan losses was disallowed from being included in
total risk-based capital under the regulatory capital rules, or
approximately 1.71% of the subsidiary bank's risk-weighted assets. In
addition, approximately $1.3 million of deferred tax assets were disallowed
for purposes of computing Consolidated Tier 1 capital.
Asset Quality
The following table presents select asset quality data (excluding loans
held for sale) as of the dates indicated:
June 30, March 31, December 31, September June 30,
2011 2011 2010 30, 2010 2010
--------- --------- ------------ ------------ ---------
(Dollars in thousands)
Nonaccrual
loans, not
restructured $ 42,142 $ 62,650 $ 74,304 $ 65,921 $ 64,339
Other
nonperforming
loans 1,675 1,506 3,317 4,420 1,065
--------- --------- ------------ ------------ ---------
Total
nonperforming
loans (NPLs) $ 43,817 $ 64,156 $ 77,621 $ 70,341 $ 65,404
Other real
estate owned
and
foreclosed
assets 28,362 33,611 22,898 45,700 30,298
--------- --------- ------------ ------------ ---------
Total
nonperforming
assets (NPAs) $ 72,179 $ 97,767 $ 100,519 $ 116,041 $ 95,702
========= ========= ============ ============ =========
Accruing loans
past due 90
days or more
(1) $ 1,675 $ 1,506 $ 3,317 $ 4,420 $ 1,065
========= ========= ============ ============ =========
Accruing
loans past
due 30-89
days (1) $ 4,750 $ 14,593 $ 21,555 $ 21,876 $ 33,050
========= ========= ============ ============ =========
Allowance for
loan losses $ 38,855 $ 46,879 $ 47,069 $ 41,898 $ 46,866
========= ========= ============ ============ =========
Selected
ratios:
NPLs to loans,
net of
unearned
discount 4.02% 5.70% 6.44% 5.45% 4.76%
NPAs to total
assets 4.13% 5.33% 5.38% 6.00% 4.82%
Allowance for
loan losses
to NPAs 53.83% 47.95% 46.83% 36.11% 48.97%
Allowance for
loan losses
to NPLs 88.67% 73.07% 60.64% 59.56% 71.66%
Allowance for
loan losses
to loans, net
of unearned
discount 3.56% 4.16% 3.91% 3.25% 3.41%
Loans 30-89
days past due
to loans, net
of unearned
discount 0.44% 1.30% 1.79% 1.70% 2.40%
(1)Past due loans include both loans that are past due with respect to
payments and loans that are past due because the loan has matured, and
are in the process of renewal, but continue to be current with respect
to payments.
The types of nonperforming loans (excluding loans held for sale) as of
June 30, 2011 and March 31, 2011 are as follows:
---------------------------------------------------------
Nonperforming Loans
---------------------------------------------------------
June 30, 2011 March 31, 2011
---------------------------- ----------------------------
Loan Related Loan Related
Balance Percent Allowance Balance Percent Allowance
-------- ------- ---------- -------- ------- ----------
(Dollars in thousands)
Residential
Construction,
Land and Land
Development $ 6,691 15.3% $ 1,104 $ 6,722 10.5% $ 742
Other Residential
Loans 5,018 11.5% 730 6,058 9.4% 1,695
Commercial and
Industrial
Loans 6,873 15.7% 1,187 19,057 29.7% 3,608
Commercial Real
Estate 25,215 57.5% 1,156 32,287 50.3% 6,091
Other 20 0.0% - 32 0.1% -
-------- ------- ---------- -------- ------- ----------
Total $ 43,817 100.0% $ 4,177 $ 64,156 100.0% $ 12,136
======== ======= ========== ======== ======= ==========
During the second quarter 2011, all categories of classified and watch list
loans declined by an aggregate of $42.7 million. In particular, during the
second quarter 2011 nonaccrual loans decreased by $20.5 million, other
classified loans decreased by $5.0 million and loans classified as special
mention or watch decreased by $17.2 million. Nonaccrual loans decreased
due to the $9.0 million of
charge-offs, with the remainder due mostly to loan payoffs, net of new
additions.
The types of loans included in the accruing loans past due 30-89 days as
of June 30, 2011 and March 31, 2011 are as follows:
-----------------------------------
Accruing loans past due 30-89 days
-----------------------------------
June 30, 2011 March 31, 2011
----------------- -----------------
Loan Loan
Balance Percent Balance Percent
-------- ------- -------- -------
(Dollars in thousands)
Residential Construction, Land and
Land Development $ 70 1.5% $ 3,302 22.6%
Other Residential Loans 3,042 64.1% 1,220 8.4%
Commercial and Industrial Loans 1,398 29.4% 5,810 39.8%
Commercial Real Estate 195 4.1% 1,305 8.9%
Other 45 0.9% 2,956 20.3%
-------- ------- -------- -------
Total $ 4,750 100.0% $ 14,593 100.0%
======== ======= ======== =======
Net charge-offs in the second quarter 2011 were $9.0 million as compared to
$2.2 million in the first quarter 2011 and $13.5 million in the second
quarter 2010. Approximately $7.9 million of the charge-offs in the second
quarter were related to three loans, with an outstanding balance of $22.2
million prior to the charge-offs. Most of the charge-offs in the second
quarter were specifically allocated for as of March 31, 2011.
In addition to the $4.2 million of allowance specifically allocated to impaired loans, the Company has partially charged-off $15.8 million related to impaired loans on the balance sheet as of June 30, 2011. These partial charge-offs reduced the specific component of our allowance for loan losses. The general component of the allowance for loan losses remained relatively flat at $34.7 million at June 30, 2011 and March 31, 2011. The general component represented 3.18% of loans, net of unearned discount, at June 30, 2011 as compared to 3.09% of loans, net of unearned discount, at the end of the previous quarter. The consistency in the overall level of the general component of the allowance for loan losses during the second quarter primarily reflects the fact charge-offs as a percentage of gross loans did not change significantly from the overall charge-off percentage over the past two years.
The Company recorded a provision for loan losses in the second quarter 2011 of $1.0 million, as compared to $2.0 million in the first quarter 2011 and $8.4 million in the second quarter 2010. The decrease in the provision for loan losses quarter over quarter reflects the continued shrinkage of our loan portfolio combined with the fact that the majority of charge-offs taken in the second quarter were specifically reserved for as of March 31, 2011. Further, additions to specific reserves requiring additional provision were minimal during the second quarter.
Shares Outstanding
As of June 30, 2011, the Company had 53,232,485 shares of common stock outstanding, including 1,518,625 shares of unvested stock awards, but excluding 156,567 shares of common stock to be issued under its deferred compensation plan. In addition, the Company had 69,013 shares of Series A convertible preferred stock outstanding, with a liquidation value of $1,000 per share.
Non-GAAP Financial Measures
This press release includes non-GAAP financial measures related to tangible assets, including tangible book value, tangible book value after giving effect to conversion of preferred stock, and tangible equity ratio, all of which exclude intangible assets.
The Company discloses these non-GAAP financial measures to provide meaningful supplemental information regarding the Company's operational performance and to enhance investors' overall understanding of the Company's core financial performance. Management believes that these non-GAAP financial measures allow for additional transparency and are used by some investors, analysts and other users of the Company's financial information as performance measures. These non-GAAP financial measures are presented for supplemental informational purposes only and should not be considered a substitute for financial information presented in accordance with GAAP. These non-GAAP financial measures presented by the Company may be different from non-GAAP financial measures used by other companies.
The following non-GAAP schedules reconcile the book value per share to the
tangible book value per share and the GAAP equity ratio to the tangible
equity ratio as of the dates indicated:
June 30, December 31, June 30,
2011 2010 2010
------------ ------------ ------------
(Dollars in thousands, except per share
amounts)
Tangible Book Value per Common
Share
Total stockholders' equity $ 165,734 $ 160,283 $ 189,005
Less: Preferred share
liquidation preference (69,013) (66,025) (63,168)
------------ ------------ ------------
Stockholders' equity
attributable to common shares 96,721 94,258 125,837
Less: Intangible assets (11,998) (14,054) (16,622)
------------ ------------ ------------
Tangible common equity $ 84,723 $ 80,204 $ 109,215
============ ============ ============
Number of common shares
outstanding and to be issued 53,389,052 53,529,950 52,913,800
Book value per common share $ 1.81 $ 1.76 $ 2.38
Tangible book value per common
share $ 1.59 $ 1.50 $ 2.06
Total stockholders' equity $ 165,734 $ 160,283 $ 189,005
Less: Intangible assets (11,998) (14,054) (16,622)
------------ ------------ ------------
Tangible common equity (after
giving effect to conversion of
preferred stock) $ 153,736 $ 146,229 $ 172,383
============ ============ ============
Number of shares of preferred
stock outstanding 69,013 66,025 63,168
Number of shares of common
stock to be issued upon
conversion of preferred
stock 38,340,556 36,680,556 35,093,333
Total number of shares of
common stock outstanding and
to be issued (after giving
effect to conversion of
preferred stock) 91,729,608 90,210,506 88,007,133
Tangible book value per
common share (after giving
effect to conversion of
preferred stock) $ 1.68 $ 1.62 $ 1.96
Tangible Equity Ratio
June 30, December 31, June 30,
2011 2010 2010
------------ ------------ ------------
(Dollars in thousands, except per share
amounts)
Total stockholders' equity $ 165,734 $ 160,283 $ 189,005
Less: Intangible assets (11,998) (14,054) (16,622)
------------ ------------ ------------
Tangible equity $ 153,736 $ 146,229 $ 172,383
============ ============ ============
Total assets $ 1,747,060 $ 1,870,052 $ 1,983,798
Less: Intangible assets (11,998) (14,054) (16,622)
------------ ------------ ------------
Tangible assets $ 1,735,062 $ 1,855,998 $ 1,967,176
============ ============ ============
Equity ratio - GAAP
(Total stockholders' equity /
total assets) 9.49% 8.57% 9.53%
Tangible equity ratio
(Tangible equity / tangible
assets) 8.86% 7.88% 8.76%
About Guaranty Bancorp
Guaranty Bancorp is a bank holding company that operates 34 branches in Colorado through a single bank, Guaranty Bank and Trust Company. The bank provides banking and other financial services including real estate, construction, commercial and industrial, energy, consumer and agricultural loans throughout its targeted Colorado markets to consumers and small to medium-sized businesses, including the owners and employees of those businesses. The bank also provides trust services, including personal trust administration, estate settlement, investment management accounts and self-directed IRAs. More information about Guaranty Bancorp can be found at www.gbnk.com.
Forward-Looking Statements
This press release contains forward-looking statements, which are included in accordance with the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "could," "expects," "plans," "intends," "anticipates," "believes," "estimates," "predicts," "potential," or "continue," or the negative of such terms and other comparable terminology. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following: failure to maintain adequate levels of capital and liquidity to support Company's operations; the effect of the regulatory written agreement the Company and its bank subsidiary have entered into and potential future supervisory action against the Company or its bank subsidiary; general economic and business conditions in those areas in which the Company operates; demographic changes; competition; fluctuations in interest rates; continued ability to attract and employ qualified personnel; ability to receive regulatory approval for our bank subsidiary to declare dividends to the Company; adequacy of our allowance for loan losses, changes in credit quality and the effect of credit quality on our provision for credit losses and allowance for loan losses; changes in governmental legislation or regulation, including, but not limited to, any increase in FDIC insurance premiums; changes in accounting policies and practices; changes in the deferred tax asset valuation allowance; changes in business strategy or development plans; changes in the securities markets; changes in consumer spending, borrowing and savings habits; the availability of capital from private or government sources; competition for loans and deposits and failure to attract or retain loans and deposits; changes in the financial performance and/or condition of our borrowers and the ability of our borrowers to perform under the terms of their loans and other terms of credit agreements; political instability, acts of war or terrorism and natural disasters; and additional "Risk Factors" referenced in the Company's most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission, as supplemented from time to time. When relying on forward-looking statements to make decisions with respect to the Company, investors and others are cautioned to consider these and other risks and uncertainties. The Company can give no assurance that any goal or plan or expectation set forth in forward-looking statements can be achieved and readers are cautioned not to place undue reliance on such statements, which speak only as of the date made. The forward-looking statements are made as of the date of this press release, and the Company does not intend, and assumes no obligation, to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements.
GUARANTY BANCORP AND SUBSIDIARIES
Unaudited Consolidated Balance Sheets
June 30, December 31, June 30,
2011 2010 2010
------------- ------------- -------------
(In thousands)
Assets
Cash and due from banks $ 134,896 $ 141,465 $ 184,507
Federal funds sold - - 194
------------- ------------- -------------
Cash and cash equivalents 134,896 141,465 184,701
------------- ------------- -------------
Securities available for
sale, at fair value 375,921 389,530 281,215
Securities held to maturity 16,277 11,927 13,897
Bank stocks, at cost 16,608 17,211 17,181
------------- ------------- -------------
Total investments 408,806 418,668 312,293
------------- ------------- -------------
Loans, net of unearned
discount 1,091,132 1,204,580 1,374,208
Less allowance for loan
losses (38,855) (47,069) (46,866)
------------- ------------- -------------
Net loans 1,052,277 1,157,511 1,327,342
------------- ------------- -------------
Loans held for sale 14,200 14,200 1,150
Premises and equipment, net 56,118 57,399 58,799
Other real estate owned and
foreclosed assets 28,362 22,898 30,298
Other intangible assets, net 11,998 14,054 16,622
Other assets 40,403 43,857 52,593
------------- ------------- -------------
Total assets $ 1,747,060 $ 1,870,052 $ 1,983,798
============= ============= =============
Liabilities and Stockholders'
Equity
Liabilities:
Deposits:
Noninterest-bearing demand $ 419,731 $ 374,500 $ 338,169
Interest-bearing demand 527,207 535,078 495,052
Savings 86,139 79,100 75,338
Time 313,106 473,673 635,712
------------- ------------- -------------
Total deposits 1,346,183 1,462,351 1,544,271
------------- ------------- -------------
Securities sold under
agreements to repurchase and
federal funds purchased 17,608 30,113 17,247
Borrowings 163,211 163,239 164,276
Subordinated debentures 41,239 41,239 41,239
Interest payable and other
liabilities 13,085 12,827 27,760
------------- ------------- -------------
Total liabilities 1,581,326 1,709,769 1,794,793
------------- ------------- -------------
Stockholders' equity:
Preferred stock and
Additional paid-in capital
- Preferred stock 67,806 64,818 61,961
Common stock and Additional
paid-in capital - Common
stock 619,855 619,509 618,996
Shares to be issued for
deferred compensation
obligations 237 237 237
Accumulated deficit (420,643) (419,562) (391,548)
Accumulated other
comprehensive income (loss) 1,038 (2,220) 1,844
Treasury Stock (102,559) (102,499) (102,485)
------------- ------------- -------------
Total stockholders'
equity 165,734 160,283 189,005
------------- ------------- -------------
Total liabilities and
stockholders' equity $ 1,747,060 $ 1,870,052 $ 1,983,798
============= ============= =============
GUARANTY BANCORP AND SUBSIDIARIES
Unaudited Consolidated Statements of Operations
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ ------------------------
2011 2010 2011 2010
----------- ----------- ----------- -----------
(In thousands, except share and per share data)
Interest income:
Loans, including fees $ 14,999 $ 19,449 $ 30,533 $ 40,233
Investment
securities:
Taxable 2,918 1,615 5,983 3,131
Tax-exempt 497 704 986 1,424
Dividends 163 182 329 367
Federal funds sold
and other 86 103 175 219
----------- ----------- ----------- -----------
Total interest
income 18,663 22,053 38,006 45,374
----------- ----------- ----------- -----------
Interest expense:
Deposits 1,886 3,994 4,515 8,707
Securities sold under
agreement to
repurchase and
federal funds
purchased 17 33 41 76
Borrowings 1,303 1,314 2,592 2,615
Subordinated
debentures 710 579 1,401 1,211
----------- ----------- ----------- -----------
Total interest
expense 3,916 5,920 8,549 12,609
----------- ----------- ----------- -----------
Net interest income 14,747 16,133 29,457 32,765
Provision for loan
losses 1,000 8,400 3,000 12,400
----------- ----------- ----------- -----------
Net interest
income, after
provision for
loan losses 13,747 7,733 26,457 20,365
Noninterest income:
Customer service and
other fees 2,386 2,254 4,700 4,468
Gain (loss) on sale
of securities (312) 1 402 15
Gain on sale of loans - 1,196 - 1,196
Other 262 274 514 468
----------- ----------- ----------- -----------
Total noninterest
income 2,336 3,725 5,616 6,147
Noninterest expense:
Salaries and employee
benefits 6,320 6,472 12,935 13,035
Occupancy expense 1,792 1,836 3,675 3,726
Furniture and
equipment 913 967 1,807 1,943
Amortization of
intangible assets 1,028 1,300 2,056 2,600
Other real estate
owned, net 466 3,115 1,229 5,864
Insurance and
assessments 966 1,825 2,191 3,637
Professional fees 914 739 1,822 1,616
Other general and
administrative 2,275 2,165 4,435 4,124
----------- ----------- ----------- -----------
Total noninterest
expense 14,674 18,419 30,150 36,545
----------- ----------- ----------- -----------
Income (loss)
before income
taxes 1,409 (6,961) 1,923 (10,033)
Income tax benefit - (2,607) - (3,834)
----------- ----------- ----------- -----------
Net Income (loss) 1,409 (4,354) 1,923 (6,199)
Preferred stock
dividends (1,518) (1,390) (3,004) (2,750)
----------- ----------- ----------- -----------
Net loss applicable to
common stockholders $ (109) $ (5,744) $ (1,081) $ (8,949)
=========== =========== =========== ===========
Loss per common
share-basic: $ 0.00 $ (0.11) $ (0.02) $ (0.17)
Loss per common
share-diluted: 0.00 (0.11) (0.02) (0.17)
Weighted average
common shares
outstanding-basic 51,919,637 51,660,603 51,809,240 51,633,972
Weighted average
common shares
outstanding-diluted 51,919,637 51,660,603 51,809,240 51,633,972
GUARANTY BANCORP AND SUBSIDIARIES
Unaudited Consolidated Average Balance Sheets
QTD Average YTD Average
----------------------------------- -----------------------
June 30, December 31, June 30, June 30, June 30,
2011 2010 2010 2011 2010
----------- ----------- ----------- ----------- -----------
(In thousands)
Assets
Interest
earning assets
Loans, net of
unearned
discount $ 1,116,801 $ 1,259,392 $ 1,418,768 $ 1,152,810 $ 1,455,494
Securities 395,199 402,101 286,469 406,035 266,107
Other earning
assets 151,451 141,025 161,611 143,841 175,878
----------- ----------- ----------- ----------- -----------
Average earning
assets 1,663,451 1,802,518 1,866,848 1,702,686 1,897,479
Other assets 104,089 137,995 132,679 115,734 135,563
----------- ----------- ----------- ----------- -----------
Total average
assets $ 1,767,540 $ 1,940,513 $ 1,999,527 $ 1,818,420 $ 2,033,042
=========== =========== =========== =========== ===========
Liabilities and
Stockholders'
Equity
Average
liabilities:
Average
deposits:
Noninterest-
bearing
deposits $ 408,106 $ 374,004 $ 352,171 $ 404,562 $ 352,551
Interest-
bearing
deposits 961,640 1,137,216 1,218,176 1,014,107 1,249,972
----------- ----------- ----------- ----------- -----------
Average
deposits 1,369,746 1,511,220 1,570,347 1,418,669 1,602,523
Other
interest-bearing
liabilities 227,133 232,459 226,212 229,225 226,592
Other
liabilities 7,396 10,520 11,268 8,369 11,126
----------- ----------- ----------- ----------- -----------
Total average
liabilities 1,604,275 1,754,199 1,807,827 1,656,263 1,840,241
Average
stockholders'
equity 163,265 186,314 191,700 162,157 192,801
----------- ----------- ----------- ----------- -----------
Total average
liabilities
and
stockholders'
equity $ 1,767,540 $ 1,940,513 $ 1,999,527 $ 1,818,420 $ 2,033,042
=========== =========== =========== =========== ===========
GUARANTY BANCORP
Unaudited Credit Quality Measures
Quarter Ended
-----------------------------------------------------
December September
June 30, March 31, 31, 30, June 30,
2011 2011 2010 2010 2010
--------- --------- --------- --------- ---------
(Dollars in thousands)
Nonaccrual loans
and leases, not
restructured $ 42,142 $ 62,650 $ 74,304 $ 65,921 $ 64,339
Other nonperforming
loans 1,675 1,506 3,317 4,420 1,065
--------- --------- --------- --------- ---------
Total
nonperforming
loans $ 43,817 $ 64,156 $ 77,621 $ 70,341 $ 65,404
--------- --------- --------- --------- ---------
Other real estate
owned and
foreclosed
assets 28,362 33,611 22,898 45,700 30,298
--------- --------- --------- --------- ---------
Total
nonperforming
assets $ 72,179 $ 97,767 $ 100,519 $ 116,041 $ 95,702
========= ========= ========= ========= =========
Impaired loans $ 43,817 $ 64,156 $ 77,621 $ 70,341 $ 65,404
Allocated allowance
for loan losses (4,177) (12,136) (6,659) (3,539) (3,716)
--------- --------- --------- --------- ---------
Net investment in
impaired loans $ 39,640 $ 52,020 $ 70,962 $ 66,802 $ 61,688
========= ========= ========= ========= =========
Accruing loans
past due 90 days
or more $ 1,675 $ 1,506 $ 3,317 $ 4,420 $ 1,065
========= ========= ========= ========= =========
Accruing loans
past due 30-89
days $ 4,750 $ 14,593 $ 21,555 $ 21,876 $ 33,050
========= ========= ========= ========= =========
Charged-off loans $ 9,997 $ 2,851 $ 14,635 $ 7,953 $ 13,918
Recoveries (973) (661) (306) (485) (369)
--------- --------- --------- --------- ---------
Net charge-offs $ 9,024 $ 2,190 $ 14,329 $ 7,468 $ 13,549
========= ========= ========= ========= =========
Provision for loan
losses $ 1,000 $ 2,000 $ 19,500 $ 2,500 $ 8,400
========= ========= ========= ========= =========
Allowance for loan
losses $ 38,855 $ 46,879 $ 47,069 $ 41,898 $ 46,866
========= ========= ========= ========= =========
Allowance for loan
losses to loans,
net of unearned
discount 3.56% 4.16% 3.91% 3.25% 3.41%
Allowance for loan
losses to
nonaccrual loans 92.20% 74.83% 63.35% 63.56% 72.84%
Allowance for loan
losses to
nonperforming
assets 53.83% 47.95% 46.83% 36.11% 48.97%
Allowance for loan
losses to
nonperforming loans 88.67% 73.07% 60.64% 59.56% 71.66%
Nonperforming assets
to loans, net of
unearned discount,
and other real
estate owned 6.45% 8.43% 8.19% 8.69% 6.81%
Nonperforming assets
to total assets 4.13% 5.33% 5.38% 6.00% 4.82%
Nonaccrual loans to
loans, net of
unearned discount 3.86% 5.56% 6.17% 5.11% 4.68%
Nonperforming loans
to loans, net of
unearned discount 4.02% 5.70% 6.44% 5.45% 4.76%
Annualized net
charge-offs to
average loans 3.24% 0.75% 4.51% 2.19% 3.83%
Contact Information:
Contact Information
For more information, please contact:
Paul W. Taylor
President, Chief Executive, Financial and Operating Officer and Secretary
Guaranty Bancorp
1331 Seventeenth Street, Suite 345
Denver, CO 80202
303/293-5563