Guaranty Bancorp Announces 2012 Second Quarter Financial Results
DENVER, CO -- (Marketwire) -- 07/18/12 -- Guaranty Bancorp (GBNK)
- Net income improves to $6.2 million in second quarter 2012
- Full reversal of deferred tax asset valuation allowance
- Nonaccrual loans declined by 28.2% during the second quarter 2012
- Previously announced acquisition of Private Capital Management expected to close in third quarter
- Core deposits increased by $46.0 million, or 4.0%, in the second quarter 2012
Guaranty Bancorp, a Colorado-based, community bank holding company, today reported second quarter 2012 net income of $6.2 million, or $0.06 earnings per basic and diluted common share, compared to net income of $1.4 million in the second quarter 2011. After giving effect to a non-cash adjustment of approximately $1.5 million for paid-in-kind preferred stock dividends, the loss per basic and diluted common share was approximately zero for the second quarter 2011.
The $4.8 million improvement in net income in the second quarter 2012 compared to the same quarter in 2011 is primarily due to the reversal of the remaining deferred tax asset valuation allowance of $5.7 million, a $0.6 million increase in net interest income, a $0.5 million reduction in provision for loan losses, and a $0.6 million increase in noninterest income, partially offset by a $2.8 million impairment loss on bank facilities scheduled to be closed.
Paul W. Taylor, Guaranty Bancorp's President and Chief Executive Officer, stated, "We are pleased with the accomplishments we have made in the second quarter. Excluding the tax benefit and impairment loss, our core operating income would have been $3.0 million. We continued to reduce our nonperforming and classified assets and ended the quarter with a classified asset to capital and allowance ratio of 33.8%, as compared to 35.6% in the prior quarter and 56.3% a year ago. New credit extended and new credit advanced on existing lines was $138.0 million in the second quarter as compared to $116.6 million in the previous quarter. Overall net loan growth in the quarter occurred despite several expected large loan payoffs, and the new loans we have booked continue to add granularity to our portfolio. Our valuable deposit mix also continues to improve with 39.6% of our deposits consisting of noninterest bearing deposits at June 30, 2012, as compared to 35.0% at the end of the prior quarter. In addition, our overall cost of deposits decreased to 0.21% in the second quarter as compared to 0.24% in the previous quarter."
Mr. Taylor continued, "We continue our focus on building a stronger balance sheet and improving income. In addition to our focus on loan and core deposit growth, we moved forward with improving our efficiency. We closed four underperforming branches in the second quarter, and with today's announcement, will close two additional underperforming branch locations later this year. Finally, we are excited to consummate the previously announced acquisition of Private Capital Management, a local investment advisory firm, expected to occur in the third quarter."
For the first six months of 2012, net income improved by $7.2 million to $9.1 million compared to $1.9 million for the same period last year. Earnings per basic and diluted common share improved to $0.09 for the six months ended June 30, 2012 from a loss per basic and diluted common share of $0.02, after giving effect to preferred stock dividends, for the same period last year. The increase in net income for the first six months of 2012 as compared to the same period in 2011 is primarily due to the reversal of the remaining deferred tax asset valuation allowance, discussed below, an increase in net interest income of $1.2 million, a decrease in provision for loan losses of $1.5 million, an increase in noninterest income of $0.4 million, and a decrease in noninterest expense, excluding the impairment of long-lived assets, of $0.9 million. These improvements were partially offset by the impairment of long-lived assets of $2.8 million recognized in June 2012 in connection with the two branch facilities scheduled to be closed later this year.
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 is more likely than not that the entire deferred tax asset will be realized.
Key Financial Measures
Income Statement
Three Months Ended Six Months Ended
----------------------------- ------------------
June 30, March 31, June 30, June 30, June 30,
2012 2012 2011 2012 2011
-------- --------- -------- -------- --------
(Dollars in thousands, except per share amounts)
Net income $ 6,192 2,917 $ 1,409 $ 9,109 $ 1,923
Net income (loss) to
common stockholders 6,192 2,917 (109) 9,109 (1,081)
Earnings (loss) per
common share $ 0.06 $ 0.03 $ (0.00) $ 0.09 $ (0.02)
Return on average assets 1.46% 0.70% 0.32% 1.09% 0.22%
Net interest margin 3.86% 3.93% 3.56% 3.90% 3.49%
Efficiency ratio 76.55% 74.57% 79.88% 75.56% 80.10%
Balance Sheet
June 30, December 31, % June 30, %
2012 2011 Change 2011 Change
---------- ------------ ------ ---------- ------
(Dollars in thousands, except per share amounts)
Cash and cash
equivalents $ 107,133 $ 109,225 (1.9)% $ 134,896 (20.6)%
Time deposits with
banks 35,000 - 100.0% - 100.0%
Total investments 398,151 386,141 3.1% 408,806 (2.6)%
Total loans, net of
unearned discount 1,110,161 1,098,140 1.1% 1,091,132 1.7%
Loans held for sale - - 0.0% 14,200 (100.0)%
Allowance for loan
losses (29,307) (34,661) (15.4)% (38,855) (24.6)%
Total assets 1,750,539 1,689,668 3.6% 1,747,060 0.2%
Average earning
assets, quarter-to-
date 1,602,777 1,575,193 1.8% 1,663,451 (3.6)%
Total deposits 1,378,937 1,313,786 5.0% 1,346,183 2.4%
Book value per
common share 1.70 1.62 4.9% 1.81 (6.1)%
Tangible book value
per common share 1.62 1.53 5.9% 1.59 1.9%
Equity ratio - GAAP 10.29% 10.12% 1.7% 9.49% 8.4%
Tangible common
equity ratio 9.85% 9.59% 2.8% 4.88% 101.9%
Total risk-based
capital ratio 16.50% 16.33% 1.0% 16.22% 1.7%
Net Interest Income and Margin
Three Months Ended Six Months Ended
----------------------------- ------------------
June 30, March 31, June 30, June 30, June 30,
2012 2012 2011 2012 2011
-------- --------- -------- -------- --------
(Dollars in thousands)
Net interest income $ 15,383 $ 15,300 $ 14,747 $ 30,683 $ 29,457
Interest rate spread 3.53% 3.62% 3.18% 3.57% 3.11%
Net interest margin 3.86% 3.93% 3.56% 3.90% 3.49%
Net interest margin,
fully tax equivalent 3.95% 4.03% 3.62% 3.99% 3.55%
Average cost of
deposits, including
noninterest bearing
deposits 0.21% 0.24% 0.55% 0.22% 0.64%
Second quarter 2012 net interest income increased by $0.1 million to $15.4 million from $15.3 million for first quarter 2012, and increased $0.6 million as compared to $14.7 million for second quarter 2011. Although the net interest income increased in the second quarter 2012, the Company's net interest margin of 3.86% reflected a decrease of seven basis points as compared to the first quarter 2012, mostly due to an increase in low-yielding overnight funding due to our growth in noninterest bearing deposits. The Company's net interest margin improved 30 basis points in the second quarter 2012 when compared to the same quarter in the prior year due to favorable improvement in our asset mix.
On a linked quarter basis, second quarter 2012 interest income remained relatively flat while interest expense decreased by $0.1 million. The decline in interest expense was primarily due to a decline in average time deposits of $10.1 million, as well as a reduction in the overall cost of deposits. This resulted in an average cost of deposits for the second quarter 2012 of 21 basis points as compared to 24 basis points for the first quarter 2012.
Second quarter 2012 interest income and interest expense decreased $1.0 million and $1.6 million, respectively, as compared to the second quarter 2011. The decline in interest income was primarily due to declines in average yields on loans and investments due to declines in longer-term, fixed rates in the market over the last twelve months and a decline in average loan balances of $6.8 million. The decline in interest expense was primarily due to a $156.1 million decline in average time deposits, mostly higher-cost, brokered time deposits. At June 30, 2012 the Company has one remaining brokered deposit of $0.1 million.
Net interest income increased $1.2 million, or 4.2%, for the first six months of 2012 to $30.7 million from $29.5 million for the same period in 2011. The Company's net interest margin improved 41 basis points to 3.90% for the first six months in 2012 from 3.49% for the first six months in 2011. During the first six months in 2012, interest income decreased $2.6 million primarily due to declines in average interest-earning assets of $118.8 million while the average yield remained relatively flat at 4.49% as compared to the same period in 2011. Interest expense decreased $3.8 million, or 44.8%, in the first six months of 2012 as compared to the same period in 2011 primarily due to a decline in average time deposit balances of $202.9 million, mostly due to the maturity of higher-cost, brokered and internet time deposits and a decline in average borrowings of $53.1 million, primarily due to the September 2011 prepayment of several Federal Home Loan Bank notes.
Noninterest Income
The following table presents noninterest income as of the dates indicated:
Three Months Ended Six Months Ended
--------------------------- -----------------
June 30, March 31, June 30, June 30, June 30,
2012 2012 2011 2012 2011
-------- --------- -------- -------- --------
(In thousands)
Noninterest income:
Customer service and other
fees $ 2,382 $ 2,271 $ 2,386 $ 4,653 $ 4,700
Gain (loss) on sale of
securities 342 622 (312) 964 402
Other 187 206 262 393 514
-------- --------- -------- -------- --------
Total noninterest income $ 2,911 $ 3,099 $ 2,336 $ 6,010 $ 5,616
======== ========= ======== ======== ========
On a linked quarter basis, noninterest income decreased $0.2 million in the second quarter 2012 primarily due to decrease in net gains on sales of securities of $0.3 million, partially offset by an increase in customer services charges of $0.1 million.
Noninterest income increased $0.6 million to $2.9 million in the second quarter 2012, as compared to $2.3 million in the second quarter 2011 primarily due to a net increase in the gain on sales of securities.
For the first six months in 2012, noninterest income increased $0.4 million to $6.0 million as compared to $5.6 million during the same period in the prior year. This increase is primarily due to the increase in the net gains on sales of securities of $0.6 million, partially offset by the slight declines in customer service charges and other fee income.
The impact of our previously announced acquisition of Private Capital Management will be reflected in noninterest income through the generation of investment advisory fees, which is anticipated to begin in the third quarter 2012.
Noninterest Expense
The following table presents noninterest expense as of the dates indicated:
Three Months Ended Six Months Ended
--------------------------- -----------------
June 30, March 31, June 30, June 30, June 30,
2012 2012 2011 2012 2011
-------- --------- -------- -------- --------
(In thousands)
Noninterest expense:
Salaries and employee
benefits $ 6,614 $ 6,857 $ 6,320 $ 13,471 $ 12,935
Occupancy expense 1,972 2,019 1,792 3,991 3,675
Furniture and equipment 783 821 913 1,604 1,807
Amortization of intangible
assets 761 762 1,028 1,523 2,056
Other real estate owned 461 352 466 813 1,229
Insurance and assessment 881 808 966 1,689 2,191
Professional fees 856 628 914 1,484 1,822
Impairment of long lived
assets 2,750 - - 2,750 -
Other general and
administrative 2,438 2,235 2,275 4,673 4,435
-------- --------- -------- -------- --------
Total noninterest expense $ 17,516 $ 14,482 $ 14,674 $ 31,998 $ 30,150
======== ========= ======== ======== ========
Noninterest expense increased $3.0 million to $17.5 million in the second quarter 2012 as compared to $14.5 million in the first quarter 2012. The increase is primarily due to a $2.8 million impairment on building premises related to the Company's decision to close two underperforming branches. This decision reflects the Company's ongoing efforts to accelerate performance by deploying assets in areas of greater opportunity. Other increases in noninterest expense include professional fees, which increased $0.2 million, related to problem assets and our previously announced acquisition of Private Capital Management, and other general and administrative expense of $0.2 million, related to marketing and business development expenses. The increase in noninterest expense is partially offset by reductions in salaries and benefit expense of $0.2 million.
As compared to the second quarter in 2011, noninterest expense increased $2.8 million as a result of the impairment of assets discussed in the previous paragraph. In addition to this impairment, several other noninterest expense categories had offsetting variances.
Noninterest expense increased $1.8 million to $32.0 million for the first six months in 2012 as compared to $30.2 million for the same period in 2011. This increase is primarily related to the $2.8 million impairment described above. Other increases in noninterest expenses are related to salary and benefits of $0.5 million primarily due to annual salary increases; occupancy expense of $0.3 million mostly due to charges associated with branch closures in June 2012; and general and administrative expense of $0.2 million mostly related to advertising and business development expense. Partially offsetting these increases in noninterest expense were decreases in furniture and equipment expense of $0.2 million mostly related to lower depreciation; intangible amortization of $0.5 million; write-downs and net operating costs related to other real estate owned of $0.4 million; insurance and assessments of $0.5 million related to lower FDIC and other insurance premiums; and professional fees of $0.3 million.
Balance Sheet
June 30, December 31, % June 30, %
2012 2011 Change 2011 Change
----------- ------------ ------ ----------- ------
(Dollars in thousands)
Total assets $ 1,750,539 $ 1,689,668 3.6% $ 1,747,060 0.2%
Average assets,
quarter-to-date 1,706,862 1,682,168 1.5% 1,767,540 (3.4)%
Total loans, net of
unearned discount 1,110,161 1,098,140 1.1% 1,091,132 1.7%
Total deposits 1,378,937 1,313,786 5.0% 1,346,183 2.4%
Equity ratio - GAAP 10.29% 10.12% 1.7% 9.49% 8.4%
Tangible common
equity ratio 9.85% 9.59% 2.8% 4.88% 101.9%
At June 30, 2012, the Company had total assets of $1.8 billion, which represented a $60.9 million increase as compared to December 31, 2011 and a $3.5 million increase as compared to June 30, 2011. The increase in assets from December 31, 2011 consists primarily of a $12.0 million increase in loans, net of unearned discount and a $47.0 million increase in investments. As compared to June 30, 2011, the increase in total assets is primarily due to an increase in loans, net of unearned discount of $19.0 million and an increase in investments of $24.0 million. These increases are partially offset by a decrease in cash and overnight funds of $27.8 million and a decrease in loans held for sale of $14.2 million.
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,
2012 2012 2011 2011
----------- ----------- ------------ -----------
(In thousands)
Loans on real estate:
Residential and
Commercial $ 746,965 $ 756,409 $ 731,107 $ 675,283
Construction 46,413 47,468 44,087 45,421
Equity lines of
credit 44,830 44,745 44,601 48,129
Commercial loans 216,974 208,995 223,479 258,990
Agricultural loans 10,712 10,417 11,527 14,193
Lease financing 2,269 2,269 2,269 3,143
Installment loans to
individuals 20,146 20,461 22,937 25,912
Overdrafts 218 179 254 869
SBA and other 23,419 20,751 19,706 20,736
----------- ----------- ------------ -----------
1,111,946 1,111,694 1,099,967 1,092,676
Unearned discount (1,785) (1,797) (1,827) (1,544)
----------- ----------- ------------ -----------
Loans, net of unearned
discount $ 1,110,161 $ 1,109,897 $ 1,098,140 $ 1,091,132
=========== =========== ============ ===========
The $12.0 million growth in total loans, net of unearned discount in the first six months in 2012 as compared to December 31, 2011 was primarily related to increases in real estate loans of $18.4 million, partially offset by a decline in commercial loans of $6.5 million. At June 30, 2012, our residential and commercial real estate portfolio included 29.1% owner-occupied properties and 7.0% multi-family properties. We have capacity to extend additional credit on residential and commercial real estate loans as evidenced by our regulatory concentration ratios discussed below.
Since June 30, 2011, the ratio of construction, land and land development loans to capital fell by 26 percentage points to 47% at June 30, 2012. During the same period, the ratio of commercial real estate loans to capital rose slightly by eight percentage points to 267%.
The following table sets forth the amounts of our deposits outstanding at the dates indicated:
June 30, March 31, December 31, June 30,
2012 2012 2011 2011
----------- ----------- ------------ -----------
(In thousands)
Noninterest-bearing
deposits $ 546,229 $ 468,133 $ 450,451 $ 419,731
Interest-bearing demand and
NOW 270,940 285,749 289,987 183,287
Money market 280,767 298,504 277,997 343,920
Savings 97,497 97,033 91,260 86,139
Time 183,504 189,509 204,091 313,106
----------- ----------- ------------ -----------
Total deposits $ 1,378,937 $ 1,338,928 $ 1,313,786 $ 1,346,183
=========== =========== ============ ===========
At June 30, 2012, noninterest-bearing deposits as a percentage of total deposits increased to 39.6% as compared to 34.3% at December 31, 2011 and 31.2% at June 30, 2011.
Non-maturing deposits increased $85.7 million, or 7.7%, in the second quarter 2012 as compared to the fourth quarter 2011 and $162.4 million, or 15.7%, as compared to second quarter 2011. Time deposits decreased $20.6 million as of June 30, 2012 as compared to December 31, 2011 and $129.6 million, as compared to June 30, 2011. Time deposits decreased over the past twelve months primarily as a result of management's efforts to reduce the overall level of higher cost time deposits. Total brokered deposits at June 30, 2012 were $0.1 million as compared to $10.2 million at December 31, 2011 and $80.2 million at June 30, 2011. Brokered deposits represented less than 0.1% of total time deposits at June 30, 2012 as compared to 5.0% at December 31, 2011 and 25.6% at June 30, 2011.
Borrowings were $110.2 million at June 30, 2012 and December 31, 2011 as compared to $163.2 million at June 30, 2011. The Company elected to payoff $51.0 million of FHLB term notes in September 2011. The weighted average rate of these advances was 3.5% with maturity dates that ranged from November 2011 to February 2014. The entire balance of borrowings at each balance sheet date consists of term notes with the FHLB.
Regulatory Capital Ratios
All of the Company's and its subsidiary bank's regulatory capital ratios are above the highest regulatory capital threshold of "well-capitalized" at June 30, 2012. The Company's and its subsidiary bank's actual capital ratios for June 30, 2012 and December 31, 2011 are presented in the table below:
Minimum
Requirement
Ratio at Ratio at Minimum for "Well
June 30, December Capital Capitalized"
2012 31, 2011 Requirement Institution
---------- ----------- ----------- ------------
Total Risk-Based Capital
Ratio:
Consolidated 16.50% 16.33% 8.00% N/A
Guaranty Bank and
Trust Company 15.67% 15.59% 8.00% 10.00%
Tier 1 Risk-Based
Capital Ratio:
Consolidated 15.24% 15.06% 4.00% N/A
Guaranty Bank and
Trust Company 14.41% 14.32% 4.00% 6.00%
Leverage Ratio:
Consolidated 12.55% 12.12% 4.00% N/A
Guaranty Bank and
Trust Company 11.84% 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 June 30, 2012, approximately $11.8 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 0.85% of our consolidated risk-weighted assets. At June 30, 2012, no deferred tax assets were disallowed for purposes of computing consolidated tier 1 risk-based capital.
Asset Quality
The following table presents select asset quality data (including loans held for sale) as of the dates indicated:
June 30, March 31, December 31, September 30, June 30,
2012 2012 2011 2011 2011
-------- --------- ------------ ------------- --------
(Dollars in thousands)
Nonaccrual loans
and leases $ 21,291 $ 29,648 $ 26,801 $ 45,790 $ 56,342
Other
nonperforming
loans - 1,301 6 583 1,675
-------- --------- ------------ ------------- --------
Total
nonperforming
loans (NPLs) $ 21,291 $ 30,949 $ 26,807 $ 46,373 $ 58,017
Other real
estate owned
and foreclosed
assets 24,640 28,072 29,027 22,008 28,362
-------- --------- ------------ ------------- --------
Total
nonperforming
assets (NPAs) $ 45,931 $ 59,021 $ 55,834 $ 68,381 $ 86,379
======== ========= ============ ============= ========
Accruing loans
past due 90
days or more
(1) $ - $ 1,301 $ 6 $ 583 $ 1,675
======== ========= ============ ============= ========
Accruing loans
past due 30-89
days (1) $ 18,448 $ 10,798 $ 10,805 $ 9,358 $ 4,750
======== ========= ============ ============= ========
Allowance for
loan losses $ 29,307 $ 30,075 $ 34,661 $ 35,852 $ 38,855
======== ========= ============ ============= ========
Selected ratios:
NPLs to loans,
net of unearned
discount 1.92% 2.79% 2.44% 4.21% 5.25%
NPAs to total
assets 2.62% 3.44% 3.30% 4.04% 4.94%
Allowance for
loan losses to
NPAs (2) 63.81% 50.96% 62.08% 66.17% 53.83%
Allowance for
loan losses to
NPLs (2) 137.65% 97.17% 129.30% 111.43% 88.67%
Allowance for
loan losses to
loans (2) 2.64% 2.71% 3.16% 3.29% 3.56%
Loans 30-89 days
past due to
loans, net of
unearned
discount 1.66% 0.97% 0.98% 0.85% 0.43%
(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.
(2) Excludes loans held for sale.
The following tables summarize our past due loans by class (including loans held for sale) as of the dates indicated:
90 days +Past
30-89 Days Due and Still Non-Accrual Total Past Total
June 30, 2012 Past Due Accruing Loans Due Loans
---------- ------------- ----------- ---------- ----------
(In thousands)
Commercial and
residential real
estate $ 16,779 $ - $ 15,021 $ 31,800 $ 745,764
Construction
loans - - 114 114 46,339
Commercial loans 1,596 - 2,759 4,355 216,626
Consumer loans 73 - 1,578 1,651 65,090
Other - - 1,819 1,819 36,342
---------- ------------- ----------- ---------- ----------
Total $ 18,448 $ - $ 21,291 $ 39,739 $1,110,161
========== ============= =========== ========== ==========
90 days +Past
30-89 Days Due and Still Non-Accrual Total Past Total
March 31, 2012 Past Due Accruing Loans Due Loans
---------- ------------- ----------- ---------- ----------
(In thousands)
Commercial and
residential real
estate $ 8,699 $ 862 $ 14,790 $ 24,351 $ 755,187
Construction
loans - - 114 114 47,391
Commercial loans 1,831 - 11,353 13,184 208,657
Consumer loans 268 439 1,713 2,420 65,279
Other - - 1,678 1,678 33,383
---------- ------------- ----------- ---------- ----------
Total $ 10,798 $ 1,301 $ 29,648 $ 41,747 $1,109,897
========== ============= =========== ========== ==========
During the second quarter 2012, nonaccrual loans decreased $8.4 million primarily due to the payoff of a single natural gas energy loan. At June 30, 2012, total classified loans declined $0.2 million and loans classified as special mention and watch loans declined $25.1 million on a linked quarter basis. At June 30, 2012, our classified assets as a percentage of capital and allowance for loan losses decreased to 33.8% as compared to 35.6% at March 31, 2012 and 36.6% at December 31, 2011. Other real estate owned decreased by $3.4 million during the second quarter 2012 as compared to the first quarter 2012.
Net charge-offs in the second quarter 2012 were $1.3 million as compared to $5.6 million in the first quarter 2012 and $9.0 million in the second quarter 2011.
The general component of the allowance for loan losses decreased from $27.5 million at March 31, 2012 to $27.0 million at June 30, 2012. The general component represented 2.4% of loans, net of unearned discount, at June 30, 2012 as compared to 2.5% 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 97.2% at March 31, 2012 to 137.7% at June 30, 2012.
The Company recorded a provision for loan losses in the second quarter 2012 of $0.5 million, as compared to $1.0 million in the first quarter 2012 and $1.0 million in the second quarter 2011. The lower level of provision for loan loss over last year reflects the overall improvement in asset quality.
Shares Outstanding
As of June 30, 2012, the Company had 106,215,690 shares of common stock outstanding, consisting of 101,120,690 shares of voting common stock and 5,095,000 shares of non-voting common stock. At June 30, 2012, total common shares outstanding include 2,280,922 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 tangible equity ratio, all of which exclude intangible assets, and net income.
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,
2012 2011 2011
------------ ------------ ------------
(Dollars in thousands, except per share
amounts)
Tangible Book Value per Common
Share
Total stockholders' equity $ 180,121 $ 171,011 $ 165,734
Less: Preferred share
liquidation preference - - (69,013)
------------ ------------ ------------
Stockholders' equity
attributable to common shares 180,121 171,011 96,721
Less: Intangible assets (8,440) (9,963) (11,998)
------------ ------------ ------------
Tangible common equity $ 171,681 $ 161,048 $ 84,723
============ ============ ============
Number of common shares
outstanding and to be issued 106,215,690 105,436,623 53,389,052
Book value per common share $ 1.70 $ 1.62 $ 1.81
Tangible book value per common
share $ 1.62 $ 1.53 $ 1.59
Tangible Common Equity Ratio
June 30, December 31, June 30,
2012 2011 2011
------------ ------------ ------------
(Dollars in thousands, except per share
amounts)
Total stockholders' equity $ 180,121 $ 171,011 $ 165,734
Less: Intangible assets (8,440) (9,963) (11,998)
Convertible Preferred Stock - - (69,013)
------------ ------------ ------------
Tangible common equity $ 171,681 $ 161,048 $ 84,723
============ ============ ============
Total assets $ 1,750,539 $ 1,689,668 $ 1,747,060
Less: Intangible assets (8,440) (9,963) (11,998)
------------ ------------ ------------
Tangible assets $ 1,742,099 $ 1,679,705 $ 1,735,062
============ ============ ============
Equity ratio - GAAP (total
stockholders' equity / total
assets) 10.29% 10.12% 9.49%
Tangible common equity ratio
(tangible common equity /
tangible assets) 9.85% 9.59% 4.88%
The following non-GAAP table reconciles net income to core net income as of the dates indicated:
June 30, December 31, June 30,
2012 2011 2011
------------ ------------ ------------
(Dollars in thousands)
Core Operating Income
Net income $ 6,192 $ 2,917 $ 1,409
Less: Tax benefit (5,914) - -
------------ ------------ ------------
Net income before tax benefit 278 2,917 1,409
Less: Impairment of long-lived
assets (2,750) - -
------------ ------------ ------------
Core operating income $ 3,028 $ 2,917 $ 1,409
============ ============ ============
About Guaranty Bancorp
Guaranty Bancorp is a bank holding company that operates 30 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 also provides private banking and 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; 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 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
June 30, December 31, June 30,
2012 2011 2011
------------ ------------ ------------
(In thousands)
Assets
Cash and due from banks $ 107,133 $ 109,225 $ 134,896
Time deposits with banks 35,000 - -
Securities available for sale, at
fair value 362,039 353,152 375,921
Securities held to maturity 21,687 18,424 16,277
Bank stocks, at cost 14,425 14,565 16,608
------------ ------------ ------------
Total investments 398,151 386,141 408,806
------------ ------------ ------------
Loans, net of unearned discount 1,110,161 1,098,140 1,091,132
Less allowance for loan losses (29,307) (34,661) (38,855)
------------ ------------ ------------
Net loans 1,080,854 1,063,479 1,052,277
------------ ------------ ------------
Loans held for sale - - 14,200
Premises and equipment, net 47,534 53,851 56,118
Other real estate owned and
foreclosed assets, net 24,640 29,027 28,362
Other intangible assets, net 8,440 9,963 11,998
Other assets 48,787 37,982 40,403
------------ ------------ ------------
Total assets $ 1,750,539 $ 1,689,668 $ 1,747,060
============ ============ ============
Liabilities and Stockholders'
Equity
Liabilities:
Deposits:
Noninterest-bearing demand $ 546,229 $ 450,451 $ 419,731
Interest-bearing demand 551,707 567,984 527,207
Savings 97,497 91,260 86,139
Time 183,504 204,091 313,106
------------ ------------ ------------
Total deposits 1,378,937 1,313,786 1,346,183
------------ ------------ ------------
Securities sold under agreements
to repurchase and federal funds
purchased 13,028 16,617 17,608
Borrowings 110,170 110,177 163,211
Subordinated debentures 41,239 41,239 41,239
Securities purchased, not yet
settled 12,557 20,800 -
Interest payable and other
liabilities 14,487 16,038 13,085
------------ ------------ ------------
Total liabilities 1,570,418 1,518,657 1,581,326
------------ ------------ ------------
Stockholders' equity:
Preferred stock and additional
paid-in capital - preferred
stock - - 67,806
Common stock and additional
paid-in capital -common stock 705,058 704,698 619,855
Shares to be issued for deferred
compensation obligations - - 237
Accumulated deficit (423,907) (433,016) (420,643)
Accumulated other comprehensive
income 1,333 1,683 1,038
Treasury stock (102,363) (102,354) (102,559)
------------ ------------ ------------
Total stockholders' equity 180,121 171,011 165,734
------------ ------------ ------------
Total liabilities and
stockholders' equity $ 1,750,539 $ 1,689,668 $ 1,747,060
============ ============ ============
GUARANTY BANCORP AND SUBSIDIARIES
Unaudited Consolidated Statements of Operations
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------- --------------------------
2012 2011 2012 2011
------------ ------------ ------------ ------------
(Dollars in thousands, except share and per share
data)
Interest income:
Loans, including
fees $ 14,511 $ 14,999 $ 28,993 $ 30,533
Investment
securities:
Taxable 2,366 2,918 4,759 5,983
Tax-exempt 618 497 1,235 986
Dividends 153 163 311 329
Federal funds sold
and other 58 86 100 175
------------ ------------ ------------ ------------
Total interest
income 17,706 18,663 35,398 38,006
------------ ------------ ------------ ------------
Interest expense:
Deposits 711 1,886 1,488 4,515
Securities sold
under agreement
to repurchase and
federal funds
purchased 12 17 24 41
Borrowings 827 1,303 1,654 2,592
Subordinated
debentures 773 710 1,549 1,401
------------ ------------ ------------ ------------
Total interest
expense 2,323 3,916 4,715 8,549
------------ ------------ ------------ ------------
Net interest
income 15,383 14,747 30,683 29,457
Provision for loan
losses 500 1,000 1,500 3,000
------------ ------------ ------------ ------------
Net interest
income, after
provision for
loan losses 14,883 13,747 29,183 26,457
Noninterest income:
Customer service
and other fees 2,382 2,386 4,653 4,700
Gain (loss) on
sale of
securities 342 (312) 964 402
Other 187 262 393 514
------------ ------------ ------------ ------------
Total
noninterest
income 2,911 2,336 6,010 5,616
Noninterest expense:
Salaries and
employee benefits 6,614 6,320 13,471 12,935
Occupancy expense 1,972 1,792 3,991 3,675
Furniture and
equipment 783 913 1,604 1,807
Amortization of
intangible assets 761 1,028 1,523 2,056
Other real estate
owned, net 461 466 813 1,229
Insurance and
assessments 881 966 1,689 2,191
Professional fees 856 914 1,484 1,822
Impairment of
long-lived assets 2,750 - 2,750 -
Other general and
administrative 2,438 2,275 4,673 4,435
------------ ------------ ------------ ------------
Total
noninterest
expense 17,516 14,674 31,998 30,150
------------ ------------ ------------ ------------
Income before
income taxes 278 1,409 3,195 1,923
Income tax expense
(benefit) (5,914) - (5,914) -
------------ ------------ ------------ ------------
Net Income $ 6,192 $ 1,409 $ 9,109 $ 1,923
============ ============ ============ ============
Net income (loss)
applicable to
common stockholders $ 6,192 $ (109) $ 9,109 $ (1,081)
============ ============ ============ ============
Earnings (loss) per
common share-basic: $ 0.06 $ 0.00 $ 0.09 $ (0.02)
Earnings (loss) per
common share-
diluted: 0.06 0.00 0.09 (0.02)
Weighted average
common shares
outstanding-basic 103,914,305 51,919,637 103,903,566 51,809,240
Weighted average
common shares
outstanding-diluted 104,238,960 51,919,637 104,286,318 51,809,240
GUARANTY BANCORP AND SUBSIDIARIES
Unaudited Consolidated Average Balance Sheets
QTD Average YTD Average
---------------------------------- ---------------------
June 30, December 31, June 30, June 30, June 30,
2012 2011 2011 2012 2011
---------- ------------ ---------- ---------- ----------
(In thousands)
Assets
Interest earning
assets
Loans, net of
unearned
discount $1,110,035 $ 1,085,975 $1,116,801 $1,107,358 $1,152,810
Securities 388,959 364,833 395,199 383,040 406,035
Other earning
assets 103,783 124,385 151,451 93,446 143,841
---------- ------------ ---------- ---------- ----------
Average earning
assets 1,602,777 1,575,193 1,663,451 1,583,844 1,702,686
Other assets 104,085 106,975 104,089 103,854 115,734
---------- ------------ ---------- ---------- ----------
Total average
assets $1,706,862 $ 1,682,168 $1,767,540 $1,687,698 $1,818,420
========== ============ ========== ========== ==========
Liabilities and
Stockholders'
Equity
Average
liabilities:
Average deposits:
Noninterest-
bearing
deposits $ 502,209 $ 459,031 $ 408,106 $ 475,571 $ 404,562
Interest-bearing
deposits 847,074 869,758 961,640 855,684 1,014,107
---------- ------------ ---------- ---------- ----------
Average deposits 1,349,283 1,328,789 1,369,746 1,331,255 1,418,669
Other interest-
bearing
liabilities 175,053 173,848 227,133 174,502 229,225
Other liabilities 6,581 9,691 7,396 7,431 8,369
---------- ------------ ---------- ---------- ----------
Total average
liabilities 1,530,917 1,512,328 1,604,275 1,513,188 1,656,263
Average
stockholders'
equity 175,945 169,840 163,265 174,510 162,157
---------- ------------ ---------- ---------- ----------
Total average
liabilities and
stockholders'
equity $1,706,862 $ 1,682,168 $1,767,540 $1,687,698 $1,818,420
========== ============ ========== ========== ==========
GUARANTY BANCORP
Unaudited Credit Quality Measures
(Includes loans held for sale, except where noted)
Quarter Ended
----------------------------------------------------------
June 30, March 31, December 31, September 30, June 30,
2012 2012 2011 2011 2011
-------- --------- ------------ ------------- --------
(Dollars in thousands)
Nonaccrual loans
and leases $ 21,291 $ 29,648 $ 26,801 $ 45,790 $ 56,342
Other
nonperforming
loans - 1,301 6 583 1,675
-------- --------- ------------ ------------- --------
Total
nonperforming
loans $ 21,291 $ 30,949 $ 26,807 $ 46,373 $ 58,017
-------- --------- ------------ ------------- --------
Other real
estate owned
and foreclosed
assets 24,640 28,072 29,027 22,008 28,362
-------- --------- ------------ ------------- --------
Total
nonperforming
assets $ 45,931 $ 59,021 $ 55,834 $ 68,381 $ 86,379
======== ========= ============ ============= ========
Total classified
assets $ 77,910 $ 81,130 $ 83,317 $ 95,916 $126,098
======== ========= ============ ============= ========
Nonperforming
loans $ 21,291 $ 30,949 $ 26,807 $ 46,373 $ 58,017
Allocated
allowance for
loan losses (2,272) (2,572) (3,490) (4,483) (4,177)
-------- --------- ------------ ------------- --------
Net investment
in impaired
loans $ 19,019 $ 28,377 $ 23,317 $ 41,890 $ 53,840
======== ========= ============ ============= ========
Accruing loans
past due 90
days or more $ - $ 1,301 $ 6 $ 583 $ 1,675
======== ========= ============ ============= ========
Accruing loans
past due 30-89
days $ 18,448 $ 10,798 $ 10,805 $ 9,358 $ 4,750
======== ========= ============ ============= ========
Charged-off
loans $ 2,062 $ 6,371 $ 2,603 $ 4,135 $ 9,997
Recoveries (794) (785) (412) (132) (973)
-------- --------- ------------ ------------- --------
Net charge-
offs $ 1,268 $ 5,586 $ 2,191 $ 4,003 $ 9,024
======== ========= ============ ============= ========
Provision for
loan losses $ 500 $ 1,000 $ 1,000 $ 1,000 $ 1,000
======== ========= ============ ============= ========
Allowance for
loan losses $ 29,307 $ 30,075 $ 34,661 $ 35,852 $ 38,855
======== ========= ============ ============= ========
Allowance for
loan losses to
loans, net of
unearned
discount (1) 2.64% 2.71% 3.16% 3.29% 3.56%
Allowance for
loan losses to
nonaccrual
loans (1) 137.65% 101.44% 129.33% 113.49% 92.20%
Allowance for
loan losses to
nonperforming
assets (1) 63.81% 50.96% 62.08% 66.17% 53.83%
Allowance for
loan losses to
nonperforming
loans (1) 137.65% 97.17% 129.30% 111.43% 88.67%
Nonperforming
assets to
loans, net of
unearned
discount, and
other real
estate owned 4.05% 5.19% 4.95% 6.08% 7.62%
Nonperforming
assets to total
assets 2.62% 3.44% 3.30% 4.04% 4.94%
Nonaccrual loans
to loans, net
of unearned
discount 1.92% 2.67% 2.44% 4.15% 5.10%
Nonperforming
loans to loans,
net of unearned
discount 1.92% 2.79% 2.44% 4.21% 5.25%
Annualized net
charge-offs to
average loans 0.46% 2.03% 0.80% 1.44% 3.24%
(1) Excludes loans held for sale
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
Source: Guaranty Bancorp
