Exhibit 99.1
Contact: | Daniel M. Quinn | Paul W. Taylor |
| President & Chief Executive Officer | E.V.P., Chief Financial & Operating Officer & Secretary |
| 1331 Seventeenth Street, Suite 300 | 1331 Seventeenth Street, Suite 300 |
| Denver, CO 80202 | Denver, CO 80202 |
| 303/313-6763 | 303/293-5563 |
FOR IMMEDIATE RELEASE:
Guaranty Bancorp Announces 2010 First Quarter Financial Results
· Net interest margin increased to 3.50%, the second consecutive quarterly increase
· Provision for loan losses decreased by 60% as compared to the previous quarter
· Quarterly charge-offs at the lowest level since 2008
· Total capital ratio increased to 14.28%, an all-time high
Denver, Colorado (April 22, 2010) — Guaranty Bancorp (Nasdaq: GBNK) today reported a first quarter 2010 net loss of $1.8 million, or $0.06 loss per basic and diluted common share after giving effect to preferred stock dividends, compared to a first quarter 2009 net income of $0.4 million, or $0.01 earnings per basic and diluted common share. The primary reason for the decrease from the prior year period is a $1.5 million increase in the provision for loan losses, as well as a $2.7 million increase in noninterest expense primarily from higher other real estate expenses. These items were partially offset by a $0.9 million increase in net interest income and a tax benefit on these items.
Dan Quinn, Guaranty Bancorp President and CEO, stated, “I continue to be encouraged by the improvement in our asset quality trends. First quarter charge-offs were 44% lower than the fourth quarter 2009 charge-offs and 60% lower than the first quarter 2009 charge-offs. Since September 30, 2009, our nonperforming assets have declined by over 10%. The provision for loan losses declined by 60% from the previous quarter to $4.0 million during the first quarter 2010 due mostly to a continued decline in overall classified assets. This is the second consecutive quarter of significant declines in the provision for loan losses as the fourth quarter 2009 provision for loan losses was 50% lower than the third quarter 2009. “
Mr. Quinn continued, “Our net interest margin also increased for the second consecutive quarter to 3.50% in the first quarter 2010, compared to 3.26% in the prior quarter. Although we continued to maintain a significant balance of low-yielding overnight funding, the net interest margin increased primarily due to higher loan yields and lower deposit costs.”
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Key Financial Measures
Income Statement
| | Quarter Ended | |
| | March 31,
2010 | | December 31,
2009 | | March 31,
2009 | |
| | | | | | | |
Earnings (loss) per common share-basic & diluted | | $ | (0.06 | ) | $ | (0.07 | ) | $ | 0.01 | |
Return on average assets | | (0.36 | )% | (0.35 | )% | 0.09 | % |
Net Interest Margin | | 3.50 | % | 3.26 | % | 3.26 | % |
| | | | | | | | | | |
Balance Sheet
| | March 31,
2010 | | December 31,
2009 | | %
Change | | March 31,
2009 | | % Change | |
| | (Dollars in thousands, except per share amounts) | |
Cash and cash equivalents | | $ | 222,723 | | $ | 234,483 | | (5.0 | )% | $ | 34,982 | | 536.7 | % |
Total investments | | 252,393 | | 248,236 | | 1.7 | % | 139,387 | | 81.1 | % |
Total loans, net of unearned discount | | 1,435,071 | | 1,519,608 | | (5.6 | )% | 1,757,103 | | (18.3 | )% |
Loans held for sale | | 11,506 | | 9,862 | | 16.7 | % | 5,175 | | 122.3 | % |
Allowance for loan losses | | (52,015 | ) | (51,991 | ) | 0.0 | % | (37,598 | ) | 38.3 | % |
Total assets | | 2,030,331 | | 2,127,580 | | (4.6 | )% | 2,036,395 | | (0.3 | )% |
Average assets, quarter-to-date | | 2,066,930 | | 2,117,257 | | (2.4 | )% | 2,065,680 | | 0.1 | % |
Total deposits | | 1,602,884 | | 1,693,290 | | (5.3 | )% | 1,639,797 | | (2.3 | )% |
Book value per common share | | 2.44 | | 2.50 | | (2.5 | )% | 3.11 | | (21.6 | )% |
Tangible book value per common share | | 2.10 | | 2.13 | | (1.4 | )% | 2.66 | | (21.0 | )% |
Tangible book value per common share (after giving effect to conversion of preferred stock) | | 1.98 | | 2.00 | | (0.9 | )% | 2.66 | | (25.5 | )% |
Book value of preferred stock | | 60,580 | | 59,227 | | 2.3 | % | None | | N/A | |
Liquidation value of preferred stock | | 61,787 | | 60,434 | | 2.2 | % | None | | N/A | |
Equity ratio — GAAP | | 9.41 | % | 9.05 | % | 4.0 | % | 8.03 | % | 17.1 | % |
Tangible equity ratio | | 8.60 | % | 8.23 | % | 4.5 | % | 6.94 | % | 23.9 | % |
Total risk-based capital ratio | | 14.28 | % | 13.80 | % | 3.5 | % | 10.82 | % | 32.0 | % |
| | | | | | | | | | | | | | |
Net Interest Income and Margin
| | Quarter Ended | |
| | March 31,
2010 | | December 31,
2009 | | September 30,
2009 | | June 30,
2009 | | March 31,
2009 | |
| | (Dollars in thousands) | |
| | | | | | | | | | | |
Net interest income | | $ | 16,632 | | $ | 16,284 | | $ | 14,911 | | $ | 15,860 | | $ | 15,718 | |
Interest rate spread | | 3.10 | % | 2.81 | % | 2.65 | % | 2.77 | % | 2.62 | % |
Net interest margin | | 3.50 | % | 3.26 | % | 3.14 | % | 3.38 | % | 3.26 | % |
Net interest margin, fully tax equivalent | | 3.58 | % | 3.34 | % | 3.23 | % | 3.46 | % | 3.34 | % |
| | | | | | | | | | | | | | | | |
First quarter 2010 net interest income of $16.6 million increased by $0.3 million from the fourth quarter 2009, and increased $0.9 million from the first quarter 2009. The Company’s net interest margin of 3.50% for the first quarter 2010 reflected an increase of 24 basis points from both the fourth quarter 2009 and the first quarter 2009. The increase in net interest margin and net interest spread in the first quarter 2010, as compared to the fourth quarter 2009, is primarily a result of an increase in loan yields and a reduction in the cost of deposits during the first quarter 2010. Loan yields were 5.65% for the first quarter 2010 as compared to 5.44% in the fourth quarter 2009, an increase of 21 basis points. The cost of deposits (excluding noninterest-bearing demand deposits) was 1.49% for the first quarter 2010 as compared to 1.74% in the previous quarter, a decline of 25
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basis points. The $0.9 million increase in net interest income in the first quarter 2010 as compared to the same quarter in 2009 is primarily due to a $4.8 million favorable rate variance which was mostly offset by a $3.9 million unfavorable volume variance. The favorable rate variance is primarily attributable to a 48 basis point increase in loan yields in the first quarter 2010 as compared to the same period in 2009, as well as a 74 basis point decline in the overall cost of funds over the same period. Loan yields increased as a result of loan repricing with minimum rates established on loan renewals throughout 2009. The overall cost of funds declined primarily due to a 137 basis point decrease in time deposit rates as certificates of deposit repriced to lower rates upon renewal. The unfavorable volume variance is primarily a result of a $316.1 million decline in average loan balances in the first quarter 2010 as compared to the same quarter in 2009.
Noninterest Income
The following table presents noninterest income as of the dates indicated:
| | Quarter Ended | |
| | March 31,
2010 | | December 31,
2009 | | September 30,
2009 | | June 30,
2009 | | March 31,
2009 | |
| | (In thousands) | |
Noninterest income: | | | | | | | | | | | |
Customer service and other fees | | $ | 2,214 | | $ | 2,206 | | $ | 2,281 | | $ | 2,354 | | $ | 2,679 | |
Gain (loss) on sale of securities | | 14 | | (1 | ) | (1 | ) | — | | — | |
Other | | 194 | | 127 | | 242 | | 277 | | 215 | |
Total noninterest income | | $ | 2,422 | | $ | 2,332 | | $ | 2,522 | | $ | 2,631 | | $ | 2,894 | |
Noninterest income for the first quarter 2010 remained relatively flat as compared to the fourth quarter 2009, and declined by approximately $0.5 million from the first quarter 2009.
The decline in noninterest income in the first quarter 2010 as compared to the same quarter in 2009 is mostly due to customer service and other fees, which declined primarily as a result of a $0.2 million decrease in analysis account fees due to lower activity, as well as a net $0.3 million decline in all other fee income.
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Noninterest Expense
The following table presents noninterest expense as of the dates indicated:
| | Quarter Ended | |
| | March 31,
2010 | | December 31, 2009 | | September 30, 2009 | | June 30,
2009 | | March 31,
2009 | |
| | (In thousands) | |
Noninterest expense: | | | | | | | | | | | |
Salaries and employee benefits | | $ | 6,563 | | $ | 6,560 | | $ | 6,536 | | $ | 6,712 | | $ | 6,739 | |
Occupancy expense | | 1,890 | | 1,854 | | 1,908 | | 1,926 | | 1,921 | |
Furniture and equipment | | 976 | | 1,060 | | 1,103 | | 1,147 | | 1,131 | |
Amortization of intangible assets | | 1,300 | | 1,556 | | 1,559 | | 1,581 | | 1,582 | |
Other real estate owned | | 2,749 | | 3,281 | | 1,654 | | 915 | | 48 | |
Insurance and assessments | | 1,812 | | 1,612 | | 1,688 | | 2,195 | | 1,041 | |
Professional fees | | 877 | | 963 | | 516 | | 896 | | 849 | |
Other general and administrative | | 1,959 | | 2,860 | | 2,517 | | 2,342 | | 2,149 | |
Total noninterest expense | | $ | 18,126 | | $ | 19,746 | | $ | 17,481 | | $ | 17,718 | | $ | 15,460 | |
Noninterest expense for the first quarter 2010 decreased by $1.6 million as compared to the fourth quarter 2009 and increased by $2.7 million from the first quarter 2009.
The $1.6 million decline in noninterest expense in the first quarter 2010 as compared to the fourth quarter 2009 is due mostly to a $0.9 million decline in other general and administrative expense, a $0.5 million decline in other real estate owned expense and a $0.3 million decline in amortization of intangible assets. The decrease in other general and administrative expenses is due to several decreases in miscellaneous other expenses. The decline in other real estate owned expense is due to a decline in write-downs on other real estate owned properties resulting from valuation adjustments and sales. The decrease in intangible asset amortization is due to accelerated amortization on our core deposit intangible assets.
The $2.7 million increase in noninterest expense in the first quarter 2010 as compared to the same period in 2009 is mostly due to a $2.7 million increase in other real estate owned expense and a $0.8 million increase in insurance and assessments. These increases were partially offset by a $0.2 million decrease in salaries and employee benefits, a combined $0.2 million decrease in occupancy and furniture & equipment expense, a $0.3 million decrease in amortization of intangible assets and a $0.2 million decrease in other general and administrative expense. The $2.7 million increase in other real estate owned expense in the first quarter 2010 as compared to the same period in 2009 is due to write-downs on other real estate owned properties resulting from valuation adjustments and sales. The $0.8 million increase in insurance and assessments is mostly due to higher FDIC insurance premiums in 2010 as compared to 2009.
Preferred Stock Dividend
On February 15, 2010, 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 $1.4 million. The effect of this preferred stock dividend was to increase the loss allocable to common shareholders as reflected in the earnings (loss) per common share computation.
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Balance Sheet
| | March 31,
2010 | | December 31,
2009 | | %
Change | | March 31,
2009 | | %
Change | |
| | (Dollars in thousands, except per share amounts) | |
Total assets | | $ | 2,030,331 | | $ | 2,127,580 | | (4.6 | )% | $ | 2,036,395 | | (0.3 | )% |
Average assets, quarter-to-date | | 2,066,930 | | 2,117,257 | | (2.4 | )% | 2,065,680 | | 0.1 | % |
Loans, net of unearned discount | | 1,435,071 | | 1,519,608 | | (5.6 | )% | 1,757,103 | | (18.3 | )% |
Total deposits | | 1,602,884 | | 1,693,290 | | (5.3 | )% | 1,639,797 | | (2.3 | )% |
| | | | | | | | | | | |
Equity ratio - GAAP | | 9.41 | % | 9.05 | % | 4.0 | % | 8.03 | % | 17.1 | % |
Tangible equity ratio | | 8.60 | % | 8.23 | % | 4.5 | % | 6.94 | % | 23.9 | % |
| | | | | | | | | | | | | | |
At March 31, 2010, total assets of $2.0 billion declined by $97.2 million, or 4.6%, as compared to December 31, 2009 and remained relatively flat as compared to March 31, 2009. The decline in assets from December 31, 2009 is mostly due to an $84.5 million decline in loans, net of unearned discount. Most of this decrease was in commercial loans. The decline in commercial loans is partly attributable to planned efforts by the bank to reduce lower yielding syndicated and participated loans.
Although total assets remained relatively flat at March 31, 2010 as compared to March 31, 2009, there was a change in the mix of assets as total loans declined by $322 million, while investment securities increased by $113 million and cash and cash equivalents increased by $187 million. The increase in cash and cash equivalents is primarily a result of management’s decision to improve the bank’s overall liquidity position. Management continues to evaluate alternatives to utilize this additional low-yielding liquidity in the existing interest-rate environment in order to improve our future net interest margin.
The GAAP equity ratio and tangible equity ratio increased at March 31, 2010 as compared to December 31, 2009. Additionally, both the GAAP equity ratio and tangible equity ratio increased significantly from March 31, 2009, primarily as a result of the issuance of $57.8 million, net of expenses, of convertible preferred stock in August 2009.
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The following table sets forth the amounts of our loans outstanding (excluding loans held for sale) at the dates indicated:
| | March 31,
2010 | | December 31,
2009 | | March 31,
2009 | |
| | (In thousands) | |
Loans on real estate: | | | | | | | |
Residential and commercial | | $ | 748,135 | | $ | 760,719 | | $ | 658,982 | |
Construction | | 111,231 | | 105,612 | | 250,665 | |
Equity lines of credit | | 53,014 | | 54,852 | | 52,679 | |
Commercial loans | | 448,908 | | 521,016 | | 714,218 | |
Agricultural loans | | 17,203 | | 18,429 | | 22,686 | |
Lease financing | | 4,014 | | 4,011 | | 3,547 | |
Installment loans to individuals | | 34,986 | | 36,175 | | 38,220 | |
Overdrafts | | 612 | | 358 | | 987 | |
SBA and other | | 19,396 | | 20,997 | | 18,294 | |
| | 1,437,499 | | 1,522,169 | | 1,760,278 | |
Unearned discount | | (2,428 | ) | (2,561 | ) | (3,175 | ) |
Loans, net of unearned discount | | $ | 1,435,071 | | $ | 1,519,608 | | $ | 1,757,103 | |
There were $912.4 million of real estate loans at March 31, 2010 as compared to $921.2 million at December 31, 2009, a decrease of $8.8 million as management continues efforts to decrease its exposure to residential and commercial real-estate.
The $139.4 million decrease in construction loans, and the $89.2 million increase in residential and commercial real estate loans at March 31, 2010 as compared to March 31, 2009 is partially due to reclassifying $124.0 million of construction loans to residential and commercial real estate loans because of the completion of the underlying building projects and the commencement of amortization on these loans. A portion of the remainder of the decrease in construction loans was a result of payoffs on existing loans, as well as moving loans to other real estate owned during 2009 and 2010.
The following table sets forth the amounts of our deposits outstanding at the dates indicated:
| | March 31,
2010 | | December 31,
2009 | | March 31,
2009 | |
| | (In thousands) | |
Noninterest bearing deposits | | $ | 363,059 | | $ | 366,103 | | $ | 422,509 | |
Interest bearing demand | | 165,315 | | 171,844 | | 140,110 | |
Money market | | 321,603 | | 352,127 | | 285,164 | |
Savings | | 74,537 | | 71,816 | | 72,157 | |
Time | | 678,370 | | 731,400 | | 719,857 | |
Total deposits | | $ | 1,602,884 | | $ | 1,693,290 | | $ | 1,639,797 | |
Total deposits decreased by $90.4 million to $1.60 billion at March 31, 2010 as compared to $1.69 billion at December 31, 2009, and decreased by $36.9 million as compared to $1.64 billion at March 31, 2009. The overall decrease in deposits during the first quarter 2010 is mostly due to a $53.0 million decline in time deposits and a $30.5 million decline in money markets due mostly to seasonal fluctuations of customer balances.
Borrowings were $164.3 million at March 31, 2010 as compared to $164.4 million at December 31, 2009, and $164.5 million at March 31, 2009. The entire balance of borrowings at each balance sheet date consisted of term advances with the Federal Home Loan Bank.
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Regulatory Capital Ratios
The Company’s and the subsidiary bank’s capital ratios increased at March 31, 2010 as compared to December 31, 2009 due to a decrease in risk-weighted assets. All of the regulatory capital ratios are above the highest regulatory capital requirement of “well-capitalized” at March 31, 2010. The Company’s and the subsidiary bank’s actual capital ratios for March 31, 2010 and December 31, 2009 are presented in the table below:
| | Ratio at
March 31,
2010 | | Ratio at
December 31,
2009 | | Minimum
Capital
Requirement | | Minimum
Requirement for
“Well
Capitalized”
Institution | |
| | | | | | | | | |
Total Risk-Based Capital Ratio: | | | | | | | | | |
Consolidated | | 14.28 | % | 13.80 | % | 8.00 | % | N/A | |
Guaranty Bank and Trust Company | | 13.40 | % | 12.82 | % | 8.00 | % | 10.00 | % |
Tier 1 Risk-Based Capital Ratio: | | | | | | | | | |
Consolidated | | 9.64 | % | 9.43 | % | 4.00 | % | N/A | |
Guaranty Bank and Trust Company | | 12.12 | % | 11.55 | % | 4.00 | % | 6.00 | % |
Leverage Ratio: | | | | | | | | | |
Consolidated | | 7.94 | % | 7.89 | % | 4.00 | % | N/A | |
Guaranty Bank and Trust Company | | 9.90 | % | 9.66 | % | 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 March 31, 2010, approximately $30.7 million of the subsidiary bank’s allowance for loan losses is disallowed from being included in total risk-based capital under the regulatory capital rules, or approximately 1.84% of the subsidiary bank’s risk-weighted assets.
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Asset Quality
The following table presents selected asset quality data (excluding loans held for sale) as of the dates indicated:
| | March 31,
2010 | | December 31,
2009 | | September 30,
2009 | | June 30,
2009 | | March 31,
2009 | |
| | (Dollars in thousands) | |
| | | | | | | | | | | |
Nonaccrual loans, not restructured | | $ | 70,500 | | $ | 59,584 | | $ | 81,035 | | $ | 52,483 | | $ | 57,299 | |
Other nonperforming loans | | 558 | | 123 | | 150 | | 2,671 | | 911 | |
| | | | | | | | | | | |
Total nonperforming loans (NPLs) | | $ | 71,058 | | $ | 59,707 | | $ | 81,185 | | $ | 55,154 | | $ | 58,210 | |
Other real estate owned and foreclosed assets | | 30,918 | | 37,192 | | 32,246 | | 34,746 | | 14,524 | |
| | | | | | | | | | | |
Total nonperforming assets (NPAs) | | $ | 101,976 | | $ | 96,899 | | $ | 113,431 | | $ | 89,900 | | $ | 72,734 | |
| | | | | | | | | | | |
Accruing loans past due 90 days or more (1) | | $ | 558 | | $ | 123 | | $ | 9,140 | | $ | 2,671 | | $ | 911 | |
| | | | | | | | | | | |
Accruing loans past due 30-89 days (1) | | $ | 21,956 | | $ | 21,709 | | $ | 52,443 | | $ | 39,836 | | $ | 31,957 | |
| | | | | | | | | | | |
Allowance for loan losses | | $ | 52,015 | | $ | 51,991 | | $ | 49,038 | | $ | 43,041 | | $ | 37,598 | |
| | | | | | | | | | | |
Selected ratios: | | | | | | | | | | | |
NPLs to loans, net of unearned discount | | 4.95 | % | 3.93 | % | 5.11 | % | 3.34 | % | 3.31 | % |
NPAs to total assets | | 5.02 | % | 4.55 | % | 5.51 | % | 4.62 | % | 3.57 | % |
Allowance for loan losses to NPAs | | 51.01 | % | 53.65 | % | 43.23 | % | 47.88 | % | 51.69 | % |
Allowance for loan losses to NPLs | | 73.20 | % | 87.08 | % | 60.40 | % | 78.04 | % | 64.59 | % |
Allowance for loan losses to loans, net of unearned discount | | 3.62 | % | 3.42 | % | 3.09 | % | 2.61 | % | 2.14 | % |
Loans 30-89 days past due to loans, net of unearned discount | | 1.53 | % | 1.43 | % | 3.30 | % | 2.41 | % | 1.82 | % |
(1) Past due loans include both loans that are past due with respect to payments, and loans that are past due with respect to the fact that the loan has matured and is in the process of renewal, but continues to be current with respect to payments.
The types of nonperforming loans (excluding loans held for sale) as of March 31, 2010 and December 31, 2009 are as follows:
| | Nonperforming Loans | |
| | March 31, 2010 | | December 31, 2009 | |
| | Loan
Balance | | Percent | | Related
Allowance | | Loan
Balance | | Percent | | Related
Allowance | |
| | (Amounts in thousands) | |
Residential Construction,Land and Land Development | | $ | 39,931 | | 56.2 | % | $ | 4,681 | | $ | 25,812 | | 43.2 | % | $ | 2,542 | |
Other Residential Loans | | 4,054 | | 5.7 | % | 649 | | 3,131 | | 5.2 | % | 623 | |
Commercial and Industrial Loans | | 10,661 | | 15.0 | % | 1,620 | | 18,206 | | 30.5 | % | 1,960 | |
Commercial Real Estate | | 16,069 | | 22.6 | % | 3,852 | | 12,188 | | 20.5 | % | 1,468 | |
Other | | 343 | | 0.5 | % | — | | 370 | | 0.6 | % | 10 | |
Total | | $ | 71,058 | | 100.0 | % | $ | 10,802 | | $ | 59,707 | | 100.0 | % | $ | 6,603 | |
The increase in nonperforming loans related to residential construction, land and land development is primarily a result of one syndicated credit that was downgraded by the lead bank, of which our share is $19.1 million. The amount of the allowance for loan losses allocated to this loan is $1.4 million. The underlying collateral on this syndicated credit is a for-rent multifamily project which is essentially leasing to plan; however, the loan was placed on nonaccrual status
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due to issues between the borrower’s parent company and the lead bank. This loan was placed on nonaccrual status due to the lead lender’s efforts to reach a broader settlement with the borrower’s parent company on this property and other projects in which we do not participate.
The types of loans included in the accruing loans past due 30-89 days as of March 31, 2010 and December 31, 2009 are as follows:
| | Accruing loans past due 30-89 days | |
| | March 31, 2010 | | December 31, 2009 | |
| | Loan Balance | | Percent | | Loan Balance | | Percent | |
| | (Amounts in thousands) | |
Residential Construction, Land and Land Development | | $ | 5,138 | | 23.4 | % | $ | 10,265 | | 47.3 | % |
Other Residential Loans | | 1,382 | | 6.3 | % | 2,103 | | 9.7 | % |
Commercial and Industrial Loans | | 5,027 | | 22.9 | % | 4,038 | | 18.6 | % |
Commercial Real Estate | | 2,268 | | 10.3 | % | 3,516 | | 16.2 | % |
Other | | 8,141 | | 37.1 | % | 1,787 | | 8.2 | % |
Total | | $ | 21,956 | | 100.0 | % | $ | 21,709 | | 100.0 | % |
The overall level of accruing loans past due 30-89 days remains stable with the previous quarter. The level of past due loans for the prior two quarters reflects a significant decline when compared to the first three quarters of 2009. At March 31, 2010, approximately $9.8 million of the $22.0 million of accruing loans past due 30-89 days were matured and in the process of renewal. These loans are current with respect to payments, but are considered past due as they have matured and are expected to be renewed. Due to more conservative underwriting requirements and pricing increases being sought, it is taking longer to negotiate and redocument the matured loans.
Net charge-offs in the first quarter 2010 were $4.0 million as compared to $7.1 million in the fourth quarter 2009 and $9.9 million in the first quarter 2009. This is the lowest level of quarterly charge-offs since 2008. Impaired loans as of March 31, 2010 totaled $71.1 million compared to $59.7 million at December 31, 2009 and $58.2 million at March 31, 2009.
The Company recorded a provision for loan losses in the first quarter 2010 of $4.0 million, as compared to $10.0 million in the fourth quarter 2009 and $2.5 million in the first quarter 2009. The first quarter 2010 provision for loan losses is 60% lower than the fourth quarter 2009. The provision for loan losses in the first quarter consisted of an $8.1 million increase in the specific component of the allowance including charge-offs on impaired loans, partially offset by a $4.1 million decrease in the general component of the allowance due primarily to declines in overall classified and watch list loans, as well as a decrease in the balance of loans that are allocated a general component of the allowance for loan losses.
Shares Outstanding
As of March 31, 2010, the Company had 52,825,468 shares of common stock outstanding, including 1,330,571 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 61,787 shares of Series A convertible preferred stock outstanding, with a liquidation value of $1,000 per share.
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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, 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 for understanding the Company’s operating results and should not be considered a substitute for financial information presented in accordance with GAAP. These non-GAAP financial measures presented by the Company may be different from non-GAAP financial measures used by other companies.
The following non-GAAP schedule reconciles the book value per share to the tangible book value per share and the tangible equity ratio as of the dates indicated:
| | March 31,
2010 | | December 31,
2009 | | March 31,
2009 | |
| | (Dollars in thousands, except per share amounts) | |
Tangible Book Value per Common Share | | | | | | | |
Total stockholders’ equity | | $ | 190,980 | | $ | 192,638 | | $ | 163,573 | |
Less: Preferred share liquidation preference | | (61,787 | ) | (60,434 | ) | — | |
Stockholders’ equity attributable to common shares | | 129,193 | | 132,204 | | 163,573 | |
Less: Intangible assets | | (17,922 | ) | (19,222 | ) | (23,918 | ) |
Tangible common equity | | $ | 111,271 | | $ | 112,982 | | $ | 139,655 | |
| | | | | | | |
Number of common shares outstanding and to be issued | | 52,982,035 | | 52,952,703 | | 52,570,986 | |
| | | | | | | |
Number of shares of preferred stock outstanding | | 61,787 | | 60,434 | | N/A | |
| | | | | | | |
Number of shares of common stock to be issued upon conversion of preferred stock | | 34,326,111 | | 33,574,444 | | N/A | |
| | | | | | | |
Book value per common share | | $ | 2.44 | | $ | 2.50 | | $ | 3.11 | |
Tangible book value per common share | | $ | 2.10 | | $ | 2.13 | | $ | 2.66 | |
Tangible book value per common share (after giving effect to conversion of preferred stock) | | $ | 1.98 | | $ | 2.00 | | $ | 2.66 | |
| | | | | | | |
Tangible Equity Ratio | | | | | | | |
Total assets | | $ | 2,030,331 | | $ | 2,127,580 | | $ | 2,036,395 | |
Less: Intangible assets | | (17,922 | ) | (19,222 | ) | (23,918 | ) |
Tangible assets | | $ | 2,012,409 | | $ | 2,108,358 | | $ | 2,012,477 | |
| | | | | | | |
Equity ratio – GAAP
(Total stockholders’ equity / total assets) | | 9.41 | % | 9.05 | % | 8.03 | % |
Tangible equity ratio | | | | | | | |
(Tangible common equity + Preferred share liquidation preference) / tangible assets | | 8.60 | % | 8.23 | % | 6.94 | % |
10
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.
11
GUARANTY BANCORP AND SUBSIDIARIES
Unaudited Consolidated Balance Sheets
| | March 31,
2010 | | December 31,
2009 | | March 31,
2009 | |
| | (In thousands) | |
Assets | | | | | | | |
Cash and due from banks | | $ | 222,723 | | $ | 234,483 | | $ | 34,982 | |
Federal funds sold | | — | | — | | 1,000 | |
Cash and cash equivalents | | 222,723 | | 234,483 | | 35,982 | |
Securities available for sale, at fair value | | 219,490 | | 221,134 | | 99,107 | |
Securities held to maturity | | 15,760 | | 9,942 | | 11,946 | |
Bank stocks, at cost | | 17,143 | | 17,160 | | 28,334 | |
Total investments | | 252,393 | | 248,236 | | 139,387 | |
| | | | | | | |
Loans, net of unearned discount | | 1,435,071 | | 1,519,608 | | 1,757,103 | |
Less allowance for loan losses | | (52,015 | ) | (51,991 | ) | (37,598 | ) |
Net loans | | 1,383,056 | | 1,467,617 | | 1,719,505 | |
Loans held for sale | | 11,506 | | 9,862 | | 5,175 | |
Premises and equipment, net | | 59,587 | | 60,267 | | 62,386 | |
Other real estate owned and foreclosed assets | | 30,918 | | 37,192 | | 14,524 | |
Other intangible assets, net | | 17,922 | | 19,222 | | 23,918 | |
Other assets | | 52,226 | | 50,701 | | 35,518 | |
Total assets | | $ | 2,030,331 | | $ | 2,127,580 | | $ | 2,036,395 | |
| | | | | | | |
Liabilities and Stockholders’ Equity | | | | | | | |
Liabilities: | | | | | | | |
Deposits: | | | | | | | |
Noninterest-bearing demand | | $ | 363,059 | | $ | 366,103 | | $ | 422,509 | |
Interest-bearing demand | | 486,918 | | 523,971 | | 425,274 | |
Savings | | 74,537 | | 71,816 | | 72,157 | |
Time | | 678,370 | | 731,400 | | 719,857 | |
Total deposits | | 1,602,884 | | 1,693,290 | | 1,639,797 | |
Securities sold under agreements to repurchase and federal funds purchased | | 18,387 | | 22,990 | | 16,291 | |
Borrowings | | 164,310 | | 164,364 | | 164,499 | |
Subordinated debentures | | 41,239 | | 41,239 | | 41,239 | |
Interest payable and other liabilities | | 12,531 | | 13,059 | | 10,996 | |
Total liabilities | | 1,839,351 | | 1,934,942 | | 1,872,822 | |
| | | | | | | |
Stockholders’ equity: | | | | | | | |
Preferred stock and Additional paid-in capital – Preferred stock | | 60,580 | | 59,227 | | — | |
Common stock and Additional paid-in capital – Common stock | | 618,779 | | 618,408 | | 617,314 | |
Shares to be issued for deferred compensation obligations | | 237 | | 199 | | 81 | |
Accumulated deficit | | (385,804 | ) | (382,599 | ) | (351,567 | ) |
Accumulated other comprehensive income (loss) | | (341 | ) | (143 | ) | 166 | |
Treasury Stock | | (102,471 | ) | (102,454 | ) | (102,421 | ) |
Total stockholders’ equity | | 190,980 | | 192,638 | | 163,573 | |
Total liabilities and stockholders’ equity | | $ | 2,030,331 | | $ | 2,127,580 | | $ | 2,036,395 | |
12
GUARANTY BANCORP AND SUBSIDIARIES
Unaudited Consolidated Statements of Operations
| | Three Months Ended March 31, | |
| | 2010 | | 2009 | |
| | (In thousands, except share and per share data) | |
Interest income: | | | | | |
Loans, including fees | | $ | 20,784 | | $ | 23,076 | |
Investment securities: | | | | | |
Taxable | | 1,516 | | 726 | |
Tax-exempt | | 720 | | 767 | |
Dividends | | 185 | | 288 | |
Federal funds sold and other | | 116 | | 3 | |
Total interest income | | 23,321 | | 24,860 | |
Interest expense: | | | | | |
Deposits | | 4,713 | | 7,125 | |
Federal funds purchased and repurchase agreements | | 43 | | 38 | |
Borrowings | | 1,301 | | 1,321 | |
Subordinated debentures | | 632 | | 658 | |
Total interest expense | | 6,689 | | 9,142 | |
Net interest income | | 16,632 | | 15,718 | |
Provision for loan losses | | 4,000 | | 2,505 | |
Net interest income, after provision for loan losses | | 12,632 | | 13,213 | |
Noninterest income: | | | | | |
Customer service and other fees | | 2,214 | | 2,679 | |
Gain on sale of securities | | 14 | | — | |
Other | | 194 | | 215 | |
Total noninterest income | | 2,422 | | 2,894 | |
Noninterest expense: | | | | | |
Salaries and employee benefits | | 6,563 | | 6,739 | |
Occupancy expense | | 1,890 | | 1,921 | |
Furniture and equipment | | 976 | | 1,131 | |
Amortization of intangible assets | | 1,300 | | 1,582 | |
Other real estate owned | | 2,749 | | 48 | |
Insurance and assessments | | 1,812 | | 1,041 | |
Professional fees | | 877 | | 849 | |
Other general and administrative | | 1,959 | | 2,149 | |
Total noninterest expense | | 18,126 | | 15,460 | |
Income (loss) before income taxes | | (3,072 | ) | 647 | |
Income tax expense (benefit) | | (1,227 | ) | 211 | |
Net income (loss) | | (1,845 | ) | 436 | |
Preferred stock dividends | | (1,360 | ) | — | |
Net income (loss) applicable to common shareholders | | $ | (3,205 | ) | $ | 436 | |
| | | | | |
Earnings (loss) per common share–basic: | | $ | (0.06 | ) | $ | 0.01 | |
Earnings (loss) per common share–diluted: | | (0.06 | ) | 0.01 | |
| | | | | |
Weighted average common shares outstanding-basic | | 51,607,044 | | 51,277,748 | |
Weighted average common shares outstanding-diluted | | 51,607,044 | | 51,277,930 | |
13
GUARANTY BANCORP AND SUBSIDIARIES
Unaudited Consolidated Average Balance Sheets
| | QTD Average | |
| | March 31,
2010 | | December 31,
2009 | | March 31,
2009 | |
| | (In thousands) | |
Assets | | | | | | | |
Interest earning assets | | | | | | | |
Loans, net of unearned discount | | $ | 1,492,630 | | $ | 1,578,761 | | $ | 1,808,727 | |
Securities | | 245,518 | | 228,608 | | 141,031 | |
Other earning assets | | 190,302 | | 176,049 | | 5,175 | |
Average earning assets | | 1,928,450 | | 1,983,418 | | 1,954,933 | |
Other assets | | 138,480 | | 133,839 | | 110,747 | |
Total average assets | | $ | 2,066,930 | | $ | 2,117,257 | | $ | 2,065,680 | |
| | | | | | | |
Liabilities and Stockholders’ Equity | | | | | | | |
Average liabilities: | | | | | | | |
Average deposits: | | | | | | | |
Noninterest-bearing deposits | | $ | 352,937 | | $ | 363,177 | | $ | 432,080 | |
Interest-bearing deposits | | 1,282,119 | | 1,320,410 | | 1,227,242 | |
Average deposits | | 1,635,056 | | 1,683,587 | | 1,659,322 | |
Other interest-bearing liabilities | | 224,856 | | 223,835 | | 230,379 | |
Other liabilities | | 13,105 | | 11,979 | | 12,122 | |
Total average liabilities | | 1,873,017 | | 1,919,401 | | 1,901,823 | |
Average stockholders’ equity | | 193,913 | | 197,856 | | 163,857 | |
Total average liabilities and stockholders’ equity | | $ | 2,066,930 | | $ | 2,117,257 | | $ | 2,065,680 | |
14
GUARANTY BANCORP
Unaudited Credit Quality Measures
| | Quarter Ended | |
| | March 31,
2010 | | December 31,
2009 | | September 30,
2009 | | June 30,
2009 | | March 31,
2009 | |
| | (Dollars in thousands) | |
Nonaccrual loans and leases, not restructured | | $ | 70,500 | | $ | 59,584 | | $ | 81,035 | | $ | 52,483 | | $ | 57,299 | |
Other nonperforming loans | | 558 | | 123 | | 150 | | 2,671 | | 911 | |
Total nonperforming loans | | $ | 71,058 | | $ | 59,707 | | $ | 81,185 | | $ | 55,154 | | $ | 58,210 | |
Other real estate owned and foreclosed assets | | 30,918 | | 37,192 | | 32,246 | | 34,746 | | 14,524 | |
Total nonperforming assets | | $ | 101,976 | | $ | 96,899 | | $ | 113,431 | | $ | 89,900 | | $ | 72,734 | |
| | | | | | | | | | | |
Impaired loans | | $ | 71,058 | | $ | 59,707 | | $ | 81,185 | | $ | 55,154 | | $ | 58,210 | |
Allocated allowance for loan losses | | (10,802 | ) | (6,603 | ) | (7,515 | ) | (7,291 | ) | (6,342 | ) |
Net investment in impaired loans | | $ | 60,256 | | $ | 53,104 | | $ | 73,670 | | $ | 47,863 | | $ | 51,868 | |
| | | | | | | | | | | |
Accruing loans past due 90 days or more | | $ | 558 | | $ | 123 | | $ | 9,140 | | $ | 2,671 | | $ | 911 | |
| | | | | | | | | | | |
Accruing loans past due 30-89 days | | $ | 21,956 | | $ | 21,709 | | $ | 52,443 | | $ | 39,836 | | $ | 31,957 | |
| | | | | | | | | | | |
Charged-off loans | | $ | 4,271 | | $ | 7,618 | | $ | 14,618 | | $ | 13,509 | | $ | 10,262 | |
Recoveries | | (295 | ) | (566 | ) | (615 | ) | (347 | ) | (367 | ) |
Net charge-offs | | $ | 3,976 | | $ | 7,052 | | $ | 14,003 | | $ | 13,162 | | $ | 9,895 | |
| | | | | | | | | | | |
Provision for loan loss | | $ | 4,000 | | $ | 10,005 | | $ | 20,000 | | $ | 18,605 | | $ | 2,505 | |
| | | | | | | | | | | |
Allowance for loan losses | | $ | 52,015 | | $ | 51,991 | | $ | 49,038 | | $ | 43,041 | | $ | 37,598 | |
Allowance for loan losses to loans, net of unearned discount | | 3.62 | % | 3.42 | % | 3.09 | % | 2.61 | % | 2.14 | % |
Allowance for loan losses to nonaccrual loans | | 73.78 | % | 87.26 | % | 60.51 | % | 82.01 | % | 65.62 | % |
Allowance for loan losses to nonperforming assets | | 51.01 | % | 53.65 | % | 43.23 | % | 47.88 | % | 51.69 | % |
Allowance for loan losses to nonperforming loans | | 73.20 | % | 87.08 | % | 60.40 | % | 78.04 | % | 64.59 | % |
Nonperforming assets to loans, net of unearned discount, and other real estate owned | | 6.96 | % | 6.22 | % | 7.00 | % | 5.33 | % | 4.11 | % |
Nonperforming assets to total assets | | 5.02 | % | 4.55 | % | 5.51 | % | 4.62 | % | 3.57 | % |
Nonaccrual loans to loans, net of unearned discount | | 4.91 | % | 3.92 | % | 5.11 | % | 3.18 | % | 3.26 | % |
Nonperforming loans to loans, net of unearned discount | | 4.95 | % | 3.93 | % | 5.11 | % | 3.34 | % | 3.31 | % |
Annualized net charge-offs to average loans | | 1.08 | % | 1.77 | % | 3.42 | % | 3.05 | % | 2.22 | % |
15
