DENVER, CO -- (Marketwire) -- 01/28/13 -- Guaranty Bancorp (NASDAQ: GBNK)
- Loan growth of $60.6 million, or 5.5% during 2012
- Increase in pre-tax net income of $5.5 million, or 87.2%, as compared to 2011
- Reduction in classified assets of $24.7 million, or 29.6%, during 2012, further reduced by an additional $10.9 million due to the sale of our largest classified asset in January 2013
- Previously announced redemption of $15.0 million of our trust preferred securities scheduled for first quarter 2013 will reduce interest expense by $1.6 million annually
Guaranty Bancorp (NASDAQ: GBNK), a Colorado-based community bank holding company, today reported fourth quarter 2012 net income of $3.1 million, or $0.03 earnings per basic and diluted common share, compared to net income of $2.3 million, or $0.02 earnings per basic and diluted common share in the fourth quarter 2011.
"We could not be more pleased with our performance in 2012," said Paul W. Taylor, President and CEO. "We successfully executed on our business plans to grow loans, increase deposits, and improve our credit quality. Our 2012 loan growth was $60.6 million, or 5.5%, despite a $71.5 million reduction in our purchased loan participations. We also grew our core deposits by $153.6 million, or 13.8% during 2012, further enhancing our high liquidity level. Continued focus on improving our credit quality metrics resulted in a substantial reduction in our classified asset ratio to 25.2% at the end of 2012 as compared to 36.6% at the end of the previous year. On a proforma basis, our classified asset ratio at December 31, 2012 improved to 20.5% after consideration of the sale of our largest classified asset on January 28, 2013."
Taylor continued, "Private Capital Management, the Colorado based investment management firm we acquired in July of 2012, also delivered outstanding results in just five short months. Assets under management grew by $14.5 million, or 8.7%, since the close of the acquisition. Additionally, the firm contributed $0.5 million to noninterest income in 2012. These accomplishments, in addition to a continued focus on enhancing profitability, make Guaranty Bancorp well positioned for further growth in 2013."
The $0.8 million improvement in net income in the fourth quarter 2012 compared to the same quarter in 2011 was primarily due to a $2.3 million increase in pre-tax income, offset by a $1.5 million increase in tax expense. The improvement in pre-tax income was primarily due to a $4.5 million decrease in provision for loan loss, due to improvements in credit quality and reduced charge-off levels, and an increase in noninterest income of $1.0 million, primarily due to increases in customer service fees and gains on sale of securities. These improvements were partially offset by a $3.1 million increase in noninterest expense, primarily driven by a $3.0 million write-down on the Company's single largest other real estate owned ("OREO") property, which was subsequently sold in January 2013.
Earnings per basic and diluted common share improved to $0.14 for the year ended December 31, 2012 as compared to a loss per basic and diluted common share of $0.21 from the prior year. The prior year loss per common share calculation included a non-cash adjustment of approximately $19.8 million, or $0.30 per basic and diluted common share, related to three quarters of paid-in-kind preferred stock dividends and the mandatory accelerated conversion of the Company's Series A Convertible Preferred Stock into common stock in September 2011.
For the year ended December 31, 2012, net income improved by $8.7 million, or 137.1%, to $15.1 million compared to $6.4 million for the year ended December 31, 2011, primarily due to the lower level of provision for loan losses of $7.0 million, attributable to continued improvements in credit quality in 2012; the reversal of the remaining deferred tax asset valuation allowance, discussed below; and the reduction in interest expense of $5.3 million, mostly due to reductions in deposit rates and the early payoff of several Federal Home Loan Bank ("FHLB") borrowings in 2011. These improvements were partially offset by a reduction in interest income of $4.7 million, due to declines in average earning assets yields, an increase in noninterest expense of $1.6 million and a decrease in noninterest income of $0.4 million, primarily due to reductions in net gains on sales of securities. The increase in noninterest expense was due to the net increase in OREO expense of $2.8 million, mostly due to the write-down discussed above, and the impairment related to the closure of two branches of $2.8 million, offset by a decrease in intangible amortization of $1.0 million and the FHLB prepayment penalty of $2.7 million recorded in 2011.
The Company had a deferred tax asset valuation allowance of $6.6 million at December 31, 2011. During the second quarter 2012, the remaining deferred tax asset valuation allowance of $5.7 million was reversed based on the Company's determination that it was more likely than not that the entire deferred tax asset would be realized. Subsequent to the reversal of the deferred tax asset valuation allowance, the Company resumed recording income tax expense.
Key Financial Measures
Income Statement
Quarter Ended Year Ended
----------------------------- -------------------
December September December December December
31, 2012 30, 2012 31, 2011 31, 2012 31, 2011
--------- --------- --------- --------- ---------
(Dollars in thousands, except per share amounts)
Net income $ 3,120 $ 2,830 $ 2,276 $ 15,059 $ 6,352
Net income (loss) to
common stockholders $ 3,120 $ 2,830 $ 2,276 $ 15,059 $ (13,434)
Earnings (loss) per common
share $ 0.03 $ 0.02 $ 0.02 $ 0.14 $ (0.21)
Return on average assets 0.67% 0.63% 0.54% 0.86% 0.36%
Net interest margin 3.48% 3.46% 3.86% 3.67% 3.61%
Efficiency ratio (tax
equivalent) 88.16% 71.56% 74.84% 77.05% 77.75%
Balance Sheet
December September % December %
31, 2012 30, 2012 Change 31, 2011 Change
---------- ---------- ------ ---------- ------
(Dollars in thousands, except per share amounts)
Cash and cash equivalents $ 121,217 $ 127,823 (5.2)% $ 109,225 11.0%
Time deposits with banks 50,000 40,000 25.0% - 100.0%
Total investments 458,927 436,386 5.2% 386,141 18.8%
Total loans, net of
unearned discount 1,158,749 1,118,968 3.6% 1,098,140 5.5%
Allowance for loan losses (25,142) (28,597) (12.1)% (34,661) (27.5)%
Total assets 1,886,938 1,834,978 2.8% 1,689,668 11.7%
Average earning assets,
quarter-to-date 1,740,273 1,670,300 4.2% 1,575,193 10.5%
Total deposits 1,454,756 1,395,096 4.3% 1,313,786 10.7%
Book value per common
share 1.78 1.74 2.3% 1.62 9.9%
Tangible book value per
common share 1.69 1.65 2.4% 1.53 10.5%
Equity ratio - GAAP 9.97% 10.09% (1.2)% 10.12% (1.5)%
Tangible common equity
ratio 9.53% 9.59% (0.6)% 9.59% (0.6)%
Total risk-based capital
ratio 16.27% 16.46% (1.2)% 16.33% (0.4)%
Net Interest Income and Margin
Quarter Ended Year Ended
------------------------------- --------------------
December September December December December
31, 2012 30, 2012 31, 2011 31, 2012 31, 2011
--------- --------- --------- --------- ---------
(Dollars in thousands)
Net interest income $ 15,217 $ 14,511 $ 15,325 $ 60,411 $ 59,894
Interest rate spread 3.21% 3.15% 3.54% 3.37% 3.25%
Net interest margin 3.48% 3.46% 3.86% 3.67% 3.61%
Net interest margin,
fully tax equivalent 3.57% 3.55% 3.95% 3.77% 3.68%
Average cost of
deposits, including
noninterest bearing
deposits 0.19% 0.20% 0.26% 0.21% 0.49%
Net interest income increased $0.7 million from $14.5 million in the third quarter 2012 to $15.2 million in the fourth quarter 2012 and decreased $0.1 million as compared to $15.3 million for the fourth quarter 2011. Net interest margin increased two basis points from 3.46% in the third quarter 2012 to 3.48% in the fourth quarter 2012 and declined 38 basis points from 3.86% in the fourth quarter 2011.
The increase in net interest income of $0.7 million from the third quarter 2012 to the fourth quarter 2012 was due to an increase in interest income of $0.6 million and a decrease in interest expense of $0.1 million. Interest income increased primarily due to increases in average loan and investment balances of $33.5 million and $48.3 million, respectively. The decrease in interest expense was the result of a reduction in subordinated debentures interest due to the payment of compounding, deferred interest during the third quarter 2012.
The decline in net interest income of $0.1 million for the fourth quarter 2012 as compared to the same quarter in 2011 was due to a reduction in interest income of $0.4 million, partially offset by a reduction in interest expense of $0.3 million. The decline in interest income was mostly due to a decline in loan income of $0.2 million and a decline in investment income of $0.2 million. The decline in interest expense was due to a change in the deposit mix from higher-cost time and money market deposits to lower yielding demand accounts, reductions in average time deposit rates and a reduction in subordinated debentures interest due to the payment of compounding, deferred interest during the third quarter 2012.
On a year-to-date basis, the net interest margin improved six basis points from 3.61% in 2011 to 3.67% in 2012, as a result of an increase in net interest income of $0.5 million and a reduction in average earning assets of $13.8 million. The improvement in net interest income was primarily due to a decrease in interest expense of $5.3 million caused by reductions in both average balances and average rates on time certificates of deposit. The improvement in interest expense was partially offset by a decrease in interest income of $4.7 million, primarily due to declines in yields on loans and investments.
Noninterest Income
The following table presents noninterest income as of the dates indicated:
Quarter Ended Year Ended
------------------------------ -------------------
December September December December December
31, 2012 30, 2012 31, 2011 31, 2012 31, 2011
--------- --------- --------- --------- ---------
(In thousands)
Noninterest income:
Customer service and
other fees $ 2,640 $ 2,616 $ 2,320 $ 9,909 $ 9,413
Gain on sale of
securities 817 746 283 2,527 3,703
Gain on sale of SBA
loans - 203 - 203 -
Other 309 250 197 952 829
--------- --------- --------- --------- ---------
Total noninterest income $ 3,766 $ 3,815 $ 2,800 $ 13,591 $ 13,945
========= ========= ========= ========= =========
Overall noninterest income remained relatively consistent in the fourth quarter 2012, as compared to prior quarter. Increases in gains on sale of securities and a gain on sale of bank facilities of $0.1 million each during the fourth quarter 2012 were offset by the gain on sale of Small Business Administration ("SBA") loans of $0.2 million during the third quarter 2012.
Noninterest income increased $1.0 million to $3.8 million in the fourth quarter 2012, as compared to $2.8 million in the fourth quarter 2011, primarily due to an increase in the gain on sale of securities of $0.5 million, an increase in customer service fees of $0.3 million related to investment management fees generated by Private Capital Management ("PCM"), acquired in July 2012, and net gains on sales of bank facilities of $0.1 million.
For the year ended December 31, 2012, noninterest income decreased $0.3 million to $13.6 million, as compared to $13.9 million during the prior year, primarily due to the decrease in the net gains on sales of securities of $1.2 million, partially offset by the gains on sales of SBA loans and bank facilities of $0.4 million, as well as the increase in customer service fees of $0.5 million, primarily investment management fees generated by PCM, as discussed in the preceding paragraph.
Noninterest Expense
The following table presents noninterest expense as of the dates indicated:
Quarter Ended Year Ended
------------------------------ -------------------
December September December December December
31, 2012 30, 2012 31, 2011 31, 2012 31, 2011
--------- --------- --------- --------- ---------
(In thousands)
Noninterest expense:
Salaries and employee
benefits $ 6,832 $ 6,466 $ 6,716 $ 26,769 $ 26,059
Occupancy expense 1,550 1,712 1,967 7,253 7,513
Furniture and equipment 760 779 846 3,143 3,508
Amortization of
intangible assets 812 803 1,017 3,138 4,091
Other real estate owned 3,209 348 240 4,370 1,559
Insurance and assessment 677 771 845 3,137 4,053
Professional fees 1,543 1,062 690 4,089 3,528
Prepayment penalty on
long term debt - - - - 2,672
Impairment of long-lived
assets - - - 2,750 -
Other general and
administrative 2,539 2,253 2,528 9,465 9,504
--------- --------- --------- --------- ---------
Total noninterest
expense $ 17,922 $ 14,194 $ 14,849 $ 64,114 $ 62,487
========= ========= ========= ========= =========
Noninterest expense increased $3.7 million to $17.9 million in the fourth quarter 2012 as compared to $14.2 million in the third quarter 2012. The increase was primarily due to an increase in OREO expenses driven by a $3.0 million write-down of a single property, which was subsequently sold in January 2013. In addition, professional fees increased $0.5 million, primarily due to legal expenses, and salary and benefits increased $0.4 million. These increases were partially of offset by a decline in occupancy expense of $0.2 million.
As compared to the fourth quarter 2011, noninterest expense increased $3.1 million primarily due to the OREO write-down discussed above. In addition, professional fees increased $0.9 million primarily related to legal expenses, which were partially offset by declines in occupancy expense of $0.4 million due to savings related to branch closures and declines in insurance and assessment expense of $0.2 million related to decreases in FDIC and other insurance premiums.
Noninterest expense increased $1.6 million to $64.1 million for the year ended December 31, 2012 as compared to $62.5 million for the same period in 2011. Increases in noninterest expense consisted of the increases in OREO expenses of $2.8 million, mostly due to the write-down discussed above, the impairment charge related to the closure of two branches of $2.8 million, an increase in professional fees of $0.6 million related to legal expenses, and an increase in salary and benefit expense of $0.7 million, primarily related to annual salary increases. These increases in noninterest expense were partially offset by the prepayment penalty on FHLB borrowings of $2.7 million incurred in September 2011; reductions in loan collection expenses of $1.0 million, as the result of improved credit quality; decrease in amortization of intangible assets of $1.0 million; reductions in insurance and assessments of $0.9 million, related to lower insurance premiums and FDIC assessments; and reductions in occupancy and furniture and equipment of $0.6 million due to savings related to branch closures in 2012.
Balance Sheet
December September % December %
31, 2012 30, 2012 Change 31, 2011 Change
---------- ---------- ------ ---------- --------
(Dollars in thousands)
Total assets $1,886,938 $1,834,978 2.8% $1,689,668 11.7%
Average assets, quarter-to-
date 1,843,212 1,776,557 3.8% 1,682,168 9.6%
Total loans, net of
unearned discount 1,158,749 1,118,968 3.6% 1,098,140 5.5%
Total deposits 1,454,756 1,395,096 4.3% 1,313,786 10.7%
Equity ratio - GAAP 9.97% 10.09% (1.2)% 10.12% (1.5)%
Tangible common equity
ratio 9.53% 9.59% (0.6)% 9.59% (0.6)%
At December 31, 2012, the Company had total assets of $1.9 billion, which represented a $52.0 million increase as compared to September 30, 2012 and a $197.3 million increase as compared to December 31, 2011. The increase in assets from September 30, 2012 consisted primarily of an increase in loans, net of unearned discount, of $39.8 million and an increase in investments of $22.5 million, partially offset by a decline in other assets of $11.2 million related to securities sold not yet settled. As compared to December 31, 2011, the increase in total assets was primarily due to an increase in investments of $72.8 million, an increase in loans, net of unearned discount, of $60.6 million, an increase in time deposits with banks of $50.0 million, and an increase in cash and cash equivalents of $12.0 million, partially offset by a decrease in OREO of $9.5 million. In addition, the allowance for loan losses decreased by $9.5 million.
The following table sets forth the amounts of loans outstanding at the dates indicated:
December September December
31, 2012 30, 2012 31, 2011
---------- ---------- ----------
(In thousands)
Loans on real estate:
Residential and Commercial $ 737,537 $ 725,498 $ 712,368
Construction 72,842 53,172 44,087
Equity lines of credit 45,308 44,131 44,601
Commercial loans 237,199 226,205 223,479
Agricultural loans 9,417 10,634 11,527
Installment loans to individuals 17,787 19,481 22,937
SBA 37,207 39,043 37,876
Other 3,043 2,521 3,092
---------- ---------- ----------
Gross loans 1,160,340 1,120,685 1,099,967
Unearned discount (1,591) (1,717) (1,827)
---------- ---------- ----------
Loans, net of unearned discount $1,158,749 $1,118,968 $1,098,140
========== ========== ==========
For the year ending December 31, 2012, loans, net of unearned discount, grew $60.6 million, despite a $71.5 million reduction in our purchased loan participations. The increase in loans is due to a $28.8 million increase in construction loans, a $25.2 million increase in residential and commercial real estate and a $13.7 million increase in commercial loans. These increases were partially offset by declines in consumer loans of $5.2 million and agricultural loans of $2.1 million. The growth in construction loans was primarily due to construction of multi-tenant retail and long-term care facilities with full lease commitments. Residential and commercial real estate growth was primarily due to commercial real estate loans for multi-tenant retail or industrial-flex office buildings that are either owner-occupied or substantially leased. Excluding reductions in our energy portfolio of $30.7 million, our commercial loans grew $45.1 million during 2012, or 27.6%. At December 31, 2012, the overall loan portfolio included 29.9% owner-occupied properties; 18.2% retail and industrial properties; 10.7% office properties; 8.9% other commercial real estate properties; and 5.4% multi-family properties. The Bank has capacity to extend additional credit on residential and commercial real estate loans pursuant to the Bank's concentration ratios discussed below.
Since December 31, 2011, the ratio of construction, land and land development loans to capital increased by five percentage points to 57% at December 31, 2012. During the same period, the ratio of commercial real estate loans to capital increased by 24 percentage points to 278%. These concentration ratios remain below the regulatory commercial real estate concentration guidelines of 100% for land and construction loans and 300% for all investor real estate loans.
The following table sets forth the amounts of deposits outstanding at the dates indicated:
December September December
31, 2012 30, 2012 31, 2011
----------- ----------- -----------
(In thousands)
Noninterest-bearing deposits $ 564,215 $ 514,912 $ 450,451
Interest-bearing demand and NOW 285,679 286,888 289,987
Money market 312,724 290,520 277,997
Savings 100,704 99,654 91,260
Time 191,434 203,122 204,091
----------- ----------- -----------
Total deposits $ 1,454,756 $ 1,395,096 $ 1,313,786
=========== =========== ===========
Non-maturing deposits increased $71.3 million, or 6.0%, in the fourth quarter 2012 as compared to the third quarter 2012 and $153.6 million, or 13.8%, as compared to fourth quarter 2011. The growth in non-maturing deposits in 2012 included approximately $50.0 million in balances from five customers. We expect these funds will be withdrawn during the first and second quarters of 2013. Time deposits decreased $11.7 million as of December 31, 2012 as compared to September 30, 2012 and $12.7 million as compared to December 31, 2011. At December 31, 2012, noninterest-bearing deposits as a percentage of total deposits increased to 38.8% as compared to 36.9% at September 30, 2012 and 34.3% at December 31, 2011.
Securities sold under agreements to repurchase decreased $16.7 million from September 30, 2012 and increased $50.4 million from December 31, 2011 to $67.0 million at December 31, 2012. The increase from prior year was primarily related to a single depositor whose balance is expected to be re-deployed into the depositor's operations during the first quarter in 2013.
Total borrowings were $110.2 million at December 31, 2012, September 30, 2012 and December 31, 2011. The entire balance of borrowings at each balance sheet date consisted of term notes with the FHLB.
Regulatory Capital Ratios
The following table provides the capital ratios of the Company and the Bank as of the dates presented, along with the applicable regulatory capital requirements:
Minimum
Requirement
Ratio at Ratio at Minimum for "Well
December 31, December 31, Capital Capitalized"
2012 2011 Requirement Institution
------------ ------------ ------------ -------------
Total Risk-Based
Capital Ratio:
Consolidated 16.27% 16.33% 8.00% N/A
Guaranty Bank and
Trust Company 15.52% 15.59% 8.00% 10.00%
Tier 1 Risk-Based
Capital Ratio:
Consolidated 15.02% 15.06% 4.00% N/A
Guaranty Bank and
Trust Company 14.26% 14.32% 4.00% 6.00%
Leverage Ratio:
Consolidated 11.93% 12.12% 4.00% N/A
Guaranty Bank and
Trust Company 11.35% 11.53% 4.00% 5.00%
Generally, the allowance for loan losses is included in total capital for regulatory purposes; however, it is limited to 1.25% of total risk-weighted assets. At December 31, 2012, approximately $7.0 million of the Bank's allowance for loan losses was disallowed from being included in total risk-based capital under the regulatory capital rules, or approximately 0.48% of the Company's consolidated risk-weighted assets.
As previously announced, the Company has submitted redemption notices to the trustee with respect to all of its $10.0 million CenBank I 10.6% and $5.0 million CenBank II 10.2% trust preferred securities. The trust preferred securities will be redeemed at a price equal to 104.24% (CenBank I) and 104.08% (CenBank II) of the liquidation amount of $1,000 per trust preferred security, respectively, plus all accrued and unpaid distributions to the respective redemption dates. The redemption of the trust preferred securities will be funded by a dividend from the Bank. The Company expects to redeem these securities during the first quarter 2013. As a result of the redemption, our consolidated total risk-based capital ratio and our Tier 1 risk-based capital ratio will decline by approximately one percentage point and our leverage ratio will decline by approximately 0.8 percentage points. All three ratios will continue to remain well above the minimum capital requirements for holding companies and well capitalized requirements for banks.
Asset Quality
The following table presents select asset quality data as of the dates indicated:
December
31, 2012
Pro
Forma December September June March December
(1) 31, 2012 30, 2012 30, 2012 31, 2012 31, 2011
-------- -------- -------- -------- -------- --------
(Dollars in thousands)
Nonaccrual loans
and leases $ 13,692 $ 13,692 $ 21,185 $ 21,291 $ 29,648 $ 26,801
Other
nonperforming
loans 224 224 543 - 1,301 6
-------- -------- -------- -------- -------- --------
Total
nonperforming
loans (NPLs) $ 13,916 $ 13,916 $ 21,728 $ 21,291 $ 30,949 $ 26,807
Other real
estate owned
and foreclosed
assets 8,730 19,580 23,532 24,640 28,072 29,027
-------- -------- -------- -------- -------- --------
Total
nonperforming
assets (NPAs) $ 22,646 $ 33,496 $ 45,260 $ 45,931 $ 59,021 $ 55,834
======== ======== ======== ======== ======== ========
Accruing loans
past due 90
days or more
(2) $ 224 $ 224 $ 543 $ - $ 1,301 $ 6
======== ======== ======== ======== ======== ========
Accruing loans
past due 30-89
days (2) $ 4,270 $ 4,270 $ 7,678 $ 18,448 $ 10,798 $ 10,805
======== ======== ======== ======== ======== ========
Allowance for
loan losses $ 25,142 $ 25,142 $ 28,597 $ 29,307 $ 30,075 $ 34,661
======== ======== ======== ======== ======== ========
Selected ratios:
NPLs to loans,
net of unearned
discount 1.20% 1.20% 1.94% 1.92% 2.79% 2.44%
NPAs to total
assets 1.20% 1.78% 2.47% 2.62% 3.44% 3.30%
Allowance for
loan losses to
NPAs 111.02% 75.06% 63.18% 63.81% 50.96% 62.08%
Allowance for
loan losses to
NPLs 180.67% 180.67% 131.61% 137.65% 97.17% 129.30%
Allowance for
loan losses to
loans 2.17% 2.17% 2.56% 2.64% 2.71% 3.16%
Loans 30-89 days
past due to
loans, net of
unearned
discount 0.37% 0.37% 0.69% 1.66% 0.97% 0.98%
Texas ratio (3) 9.72% 14.37% 19.49% 19.92% 25.93% 24.55%
Classified asset
ratio (4) 20.50% 25.16% 32.10% 33.79% 35.64% 36.62%
(1) December 31, 2012 Pro Forma represents data subsequent to the sale of
our largest OREO property in January 2013.
(2) 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.
(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 by class as of the dates indicated:
90 days
+Past Due Non-
30-89 Days and Still Accrual Total Past Total
December 31, 2012 Past Due Accruing Loans Due Loans
---------- ---------- ---------- ---------- ----------
(In thousands)
Commercial and
residential real
estate $ 832 $ 224 $ 8,034 $ 9,090 $ 736,524
Construction loans - - - - 72,742
Commercial loans 2,671 - 3,005 5,676 236,874
Consumer loans 140 - 1,332 1,472 64,307
Other 627 - 1,321 1,948 48,302
---------- ---------- ---------- ---------- ----------
Total $ 4,270 $ 224 $ 13,692 $ 18,186 $1,158,749
========== ========== ========== ========== ==========
90 days
+Past Due Non-
30-89 Days and Still Accrual Total Past Total
September 30, 2012 Past Due Accruing Loans Due Loans
---------- ---------- ---------- ---------- ----------
(In thousands)
Commercial and
residential real
estate $ 6,280 $ 543 $ 15,056 $ 21,879 $ 724,388
Construction loans - - - - 53,091
Commercial loans 753 - 3,217 3,970 225,858
Consumer loans 612 - 1,541 2,153 63,749
Other 33 - 1,371 1,404 51,882
---------- ---------- ---------- ---------- ----------
Total $ 7,678 $ 543 $ 21,185 $ 29,406 $1,118,968
========== ========== ========== ========== ==========
During the fourth quarter 2012, nonaccrual loans declined $7.5 million as compared to third quarter 2012, primarily due to the payoff of the largest single nonaccrual loan. In addition, classified loans declined $11.7 million and loans classified as special mention and watch loans declined by $14.5 million. OREO decreased by $4.0 million during the fourth quarter 2012 as compared to the third quarter 2012, primarily driven by the $3.0 million write down on the Company's single largest OREO property, which was subsequently sold in January 2013.
At December 31, 2012, classified assets as a percentage of capital and allowance for loan losses were 25.2%, a favorable decline from 32.1% at September 30, 2012 and 36.6% at December 31, 2011.
Net charge-offs in the fourth quarter 2012 were negligible as compared to $0.7 million in the third quarter 2012 and $2.2 million in the fourth quarter 2011.
The general component of the allowance for loan losses decreased from $24.8 million at September 30, 2012 to $22.5 million at December 31, 2012. The general component represented 1.9% of loans, net of unearned discount, at December 31, 2012 as compared to 2.2% of loans, net of unearned discount, at the end of the previous quarter. The coverage ratio, defined as allowance for loan losses divided by nonperforming loans, increased from 131.6% at September 30, 2012 to 180.7% at December 31, 2012.
The Company recorded a $3.5 million negative provision for loan losses in the fourth quarter 2012, as compared to no provision in the third quarter 2012 and $1.0 million in the fourth quarter 2011. The decrease in provision for loan losses over the last year reflects an overall improvement in asset quality and the declines in net historical charge-offs.
Shares Outstanding
As of December 31, 2012, the Company had 105,847,607 shares of common stock outstanding, consisting of 100,752,607 shares of voting common stock and 5,095,000 shares of non-voting common stock. At December 31, 2012, total common shares outstanding include 1,696,796 shares of unvested stock awards.
Non-GAAP Financial Measures
This press release includes non-GAAP financial measures related to tangible assets, including tangible book value and the 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:
December 31, September 30, December 31,
2012 2012 2011
------------- ------------- -------------
(Dollars in thousands, except per share
amounts)
Tangible Book Value per Common
Share
Total stockholders' equity $ 188,200 $ 185,073 $ 171,011
Less: Intangible assets (9,348) (10,161) (9,963)
------------- ------------- -------------
Tangible common equity $ 178,852 $ 174,912 $ 161,048
============= ============= =============
Number of common shares
outstanding 105,847,607 106,256,654 105,436,623
Book value per common share $ 1.78 $ 1.74 $ 1.62
Tangible book value per common
share $ 1.69 $ 1.65 $ 1.53
Tangible Common Equity Ratio
December 31, September 30, December 31,
2012 2012 2011
------------- ------------- -------------
(Dollars in thousands, except per share
amounts)
Total stockholders' equity $ 188,200 $ 185,073 $ 171,011
Less: Intangible assets (9,348) (10,161) (9,963)
------------- ------------- -------------
Tangible common equity $ 178,852 $ 174,912 $ 161,048
============= ============= =============
Total assets $ 1,886,938 $ 1,834,978 $ 1,689,668
Less: Intangible assets (9,348) (10,161) (9,963)
------------- ------------- -------------
Tangible assets $ 1,877,590 $ 1,824,817 $ 1,679,705
============= ============= =============
Equity ratio - GAAP (total
stockholders' equity / total
assets) 9.97% 10.09% 10.12%
Tangible common equity ratio
(tangible common equity /
tangible assets) 9.53% 9.59% 9.59%
About Guaranty Bancorp
Guaranty Bancorp is a bank holding company that operates 28 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 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 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 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
December 31, September 30, December 31,
2012 2012 2011
------------- ------------- -------------
(In thousands)
Assets
Cash and due from banks $ 121,217 $ 127,823 $ 109,225
Time deposits with banks 50,000 40,000 -
Securities available for sale,
at fair value 413,382 395,632 353,152
Securities held to maturity 31,283 26,286 18,424
Bank stocks, at cost 14,262 14,468 14,565
------------- ------------- -------------
Total investments 458,927 436,386 386,141
------------- ------------- -------------
Loans, net of unearned discount 1,158,749 1,118,968 1,098,140
Less allowance for loan
losses (25,142) (28,597) (34,661)
------------- ------------- -------------
Net loans 1,133,607 1,090,371 1,063,479
------------- ------------- -------------
Premises and equipment, net 46,918 47,083 53,851
Other real estate owned and
foreclosed assets, net 19,580 23,532 29,027
Other intangible assets, net 9,348 10,161 9,963
Securities sold, not yet
settled 5,878 15,628 -
Other assets 41,463 43,994 37,982
------------- ------------- -------------
Total assets $ 1,886,938 $ 1,834,978 $ 1,689,668
============= ============= =============
Liabilities and Stockholders'
Equity
Liabilities:
Deposits:
Noninterest-bearing demand $ 564,215 $ 514,912 $ 450,451
Interest-bearing demand and
NOW 285,679 286,888 289,987
Money market 312,724 290,520 277,997
Savings 100,704 99,654 91,260
Time 191,434 203,122 204,091
------------- ------------- -------------
Total deposits 1,454,756 1,395,096 1,313,786
------------- ------------- -------------
Securities sold under
agreements to repurchase and
federal funds purchased 67,040 83,734 16,617
Borrowings 110,163 110,166 110,177
Subordinated debentures 41,239 41,239 41,239
Securities purchased, not yet
settled 16,943 12,311 20,800
Interest payable and other
liabilities 8,597 7,359 16,038
------------- ------------- -------------
Total liabilities 1,698,738 1,649,905 1,518,657
------------- ------------- -------------
Stockholders' equity:
Common stock and additional
paid-in capital-common stock 705,389 705,238 704,698
Accumulated deficit (417,957) (421,077) (433,016)
Accumulated other
comprehensive income 3,165 3,277 1,683
Treasury stock (102,397) (102,365) (102,354)
------------- ------------- -------------
Total stockholders'
equity 188,200 185,073 171,011
------------- ------------- -------------
Total liabilities and
stockholders' equity $ 1,886,938 $ 1,834,978 $ 1,689,668
============= ============= =============
GUARANTY BANCORP AND SUBSIDIARIES
Unaudited Consolidated Statements of Operations
Quarter Ended December 31, Year Ended December 31,
-------------------------- --------------------------
2012 2011 2012 2011
------------ ------------ ------------ ------------
(Dollars in thousands, except share and per share
data)
Interest income:
Loans, including
fees $ 14,303 $ 14,552 $ 57,326 $ 59,985
Investment
securities:
Taxable 2,127 2,441 8,746 11,277
Tax-exempt 691 582 2,558 2,066
Dividends 156 158 631 653
Federal funds sold
and other 99 71 304 332
------------ ------------ ------------ ------------
Total interest
income 17,376 17,804 69,565 74,313
------------ ------------ ------------ ------------
Interest expense:
Deposits 693 878 2,878 6,746
Securities sold
under agreement to
repurchase and
federal funds
purchased 22 14 67 74
Borrowings 836 836 3,327 4,727
Subordinated
debentures 608 751 2,882 2,872
------------ ------------ ------------ ------------
Total interest
expense 2,159 2,479 9,154 14,419
------------ ------------ ------------ ------------
Net interest
income 15,217 15,325 60,411 59,894
Provision (credit)
for loan losses (3,500) 1,000 (2,000) 5,000
------------ ------------ ------------ ------------
Net interest
income, after
provision for
loan losses 18,717 14,325 62,411 54,894
Noninterest income:
Customer service
and other fees 2,640 2,320 9,909 9,413
Gain on sale of
securities 817 283 2,527 3,703
Gain on sale of SBA
loans - - 203 -
Other 309 197 952 829
------------ ------------ ------------ ------------
Total noninterest
income 3,766 2,800 13,591 13,945
Noninterest expense:
Salaries and
employee benefits 6,832 6,716 26,769 26,059
Occupancy expense 1,550 1,967 7,253 7,513
Furniture and
equipment 760 846 3,143 3,508
Amortization of
intangible assets 812 1,017 3,138 4,091
Other real estate
owned, net 3,209 240 4,370 1,559
Insurance and
assessments 677 845 3,137 4,053
Professional fees 1,543 690 4,089 3,528
Prepayment penalty
on long term debt - - - 2,672
Impairment of long-
lived assets - - 2,750 -
Other general and
administrative 2,539 2,528 9,465 9,504
------------ ------------ ------------ ------------
Total noninterest
expense 17,922 14,849 64,114 62,487
------------ ------------ ------------ ------------
Income before
income taxes 4,561 2,276 11,888 6,352
Income tax expense
(benefit) 1,441 - (3,171) -
------------ ------------ ------------ ------------
Net Income $ 3,120 $ 2,276 $ 15,059 $ 6,352
============ ============ ============ ============
Net income (loss)
applicable to common
stockholders $ 3,120 $ 2,276 $ 15,059 $ (13,454)
============ ============ ============ ============
Earnings (loss) per
common share-basic: $ 0.03 $ 0.02 $ 0.14 $ (0.21)
Earnings (loss) per
common share-
diluted: 0.03 0.02 0.14 (0.21)
Weighted average
common shares
outstanding-basic 103,988,407 103,840,990 103,934,009 64,941,731
Weighted average
common shares
outstanding-diluted 104,337,595 104,060,096 104,391,256 64,941,731
GUARANTY BANCORP AND SUBSIDIARIES
Unaudited Consolidated Average Balance Sheets
QTD Average YTD Average
December September December December December
31, 2012 30, 2012 31, 2011 31, 2012 31, 2011
---------- ---------- ---------- ---------- ----------
(In thousands)
Assets
Interest earning
assets
Loans, net of
unearned discount $1,129,893 $1,096,395 $1,085,975 $1,110,267 $1,123,619
Securities 451,342 403,053 364,833 405,240 394,456
Other earning
assets 159,038 170,852 124,385 129,391 140,608
---------- ---------- ---------- ---------- ----------
Average earning
assets 1,740,273 1,670,300 1,575,193 1,644,898 1,658,683
Other assets 102,939 106,257 106,975 104,217 110,249
---------- ---------- ---------- ---------- ----------
Total average assets $1,843,212 $1,776,557 $1,682,168 $1,749,115 $1,768,932
========== ========== ========== ========== ==========
Liabilities and
Stockholders' Equity
Average liabilities:
Average deposits:
Noninterest-bearing
deposits $ 521,000 $ 515,157 $ 459,031 $ 496,940 $ 425,763
Interest-bearing
deposits 895,729 861,685 869,758 867,259 953,727
---------- ---------- ---------- ---------- ----------
Average deposits 1,416,729 1,376,842 1,328,789 1,364,199 1,379,490
Other interest-
bearing liabilities 232,004 208,643 173,848 197,633 215,093
Other liabilities 8,736 8,739 9,691 7,983 8,548
---------- ---------- ---------- ---------- ----------
Total average
liabilities 1,657,469 1,594,224 1,512,328 1,569,815 1,603,131
Average stockholders'
equity 185,743 182,333 169,840 179,300 165,801
---------- ---------- ---------- ---------- ----------
Total average
liabilities and
stockholders' equity $1,843,212 $1,776,557 $1,682,168 $1,749,115 $1,768,932
========== ========== ========== ========== ==========
GUARANTY BANCORP
Unaudited Credit Quality Measures
Quarter Ended
-----------------------------------------------------------
December September June 30, March 31, December
31, 2012 30, 2012 2012 2012 31, 2011
---------- ---------- ---------- ---------- ----------
(Dollars in thousands)
Nonaccrual
loans and
leases $ 13,692 $ 21,185 $ 21,291 $ 29,648 $ 26,801
Other
nonperforming
loans 224 543 - 1,301 6
---------- ---------- ---------- ---------- ----------
Total
nonperformin
g loans $ 13,916 $ 21,728 $ 21,291 $ 30,949 $ 26,807
---------- ---------- ---------- ---------- ----------
Other real
estate owned
and foreclosed
assets 19,580 23,532 24,640 28,072 29,027
---------- ---------- ---------- ---------- ----------
Total
nonperformin
g assets $ 33,496 $ 45,260 $ 45,931 $ 59,021 $ 55,834
========== ========== ========== ========== ==========
Total
classified
assets $ 58,635 $ 74,514 $ 77,910 $ 81,130 $ 83,317
========== ========== ========== ========== ==========
Nonperforming
loans $ 13,916 $ 21,728 $ 21,291 $ 30,949 $ 26,807
Other
restructured
loans still
accruing 3,838 - - - -
Allocated
allowance for
loan losses (2654) (3,774) (1,859) (2,572) (3,490)
---------- ---------- ---------- ---------- ----------
Net
investment
in impaired
loans $ 15,100 $ 17,954 $ 19,432 $ 28,377 $ 23,317
========== ========== ========== ========== ==========
Accruing loans
past due 90
days or more $ 224 $ 543 $ - $ 1,301 $ 6
========== ========== ========== ========== ==========
Accruing loans
past due 30-89
days $ 4,270 $ 7,678 $ 18,448 $ 10,798 $ 10,805
========== ========== ========== ========== ==========
Charged-off
loans $ 1,199 $ 1,067 $ 2,062 $ 6,371 $ 2,603
Recoveries (1,244) (357) (794) (785) (412)
---------- ---------- ---------- ---------- ----------
Net charge-
offs $ (45) $ 710 $ 1,268 $ 5,586 $ 2,191
========== ========== ========== ========== ==========
Provision for
loan losses $ (3,500) $ - $ 500 $ 1,000 $ 1,000
========== ========== ========== ========== ==========
Allowance for
loan losses $ 25,142 $ 28,597 $ 29,307 $ 30,075 $ 34,661
========== ========== ========== ========== ==========
Allowance for
loan losses to
loans, net of
unearned
discount 2.17% 2.56% 2.64% 2.71% 3.16%
Allowance for
loan losses to
nonaccrual
loans 183.63% 134.99% 137.65% 101.44% 129.33%
Allowance for
loan losses to
nonperforming
assets 75.06% 63.18% 63.81% 50.96% 62.08%
Allowance for
loan losses to
nonperforming
loans 180.67% 131.61% 137.65% 97.17% 129.30%
Nonperforming
assets to
loans, net of
unearned
discount, and
other real
estate owned 2.84% 3.96% 4.05% 5.19% 4.95%
Nonperforming
assets to
total assets 1.78% 2.47% 2.62% 3.44% 3.30%
Nonaccrual
loans to
loans, net of
unearned
discount 1.18% 1.89% 1.92% 2.67% 2.44%
Nonperforming
loans to
loans, net of
unearned
discount 1.20% 1.94% 1.92% 2.79% 2.44%
Annualized net
charge-offs to
average loans (0.02)% 0.26% 0.46% 2.03% 0.80%
Contact:
Paul W. Taylor
President and Chief Executive Officer
Guaranty Bancorp
1331 Seventeenth Street, Suite 345
Denver, CO 80202
303/293-5563
Christopher G. Treece
E.V.P., Chief Financial Officer and Secretary
Guaranty Bancorp
1331 Seventeenth Street, Suite 345
Denver, CO 80202
303/675-1194
