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 January 27, 2016 - 4:10 PM EST
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Guaranty Bancorp Announces 2015 Annual and Fourth Quarter Financial Results

DENVER, CO--(Marketwired - January 27, 2016) - Guaranty Bancorp (NASDAQ: GBNK)

  • Grew net loans by 17.7% during 2015
  • Increased net income by 66.2% during 2015 as compared to 2014
  • Expanded 2015 return on average assets significantly to 1.01% as compared to 0.68% in 2014
  • Improved the efficiency ratio to 60.2% during 2015 as compared to 65.6% during 2014

Guaranty Bancorp (NASDAQ: GBNK) ("we", "our" or "the Company"), a community bank holding company based in Colorado, today announced fourth quarter 2015 net income of $5.9 million or $0.28 per basic and diluted common share, an increase of $4.7 million or $0.22 per basic and diluted common share as compared to the fourth quarter 2014. For the year ended December 31, 2015, net income was $22.5 million or $1.07 per basic common share and $1.06 per diluted common share, an increase of $8.9 million or $0.43 per basic common share and $0.42 per diluted common share as compared to the year ended December 31, 2014.

"I am very pleased with our results for 2015," said Paul W. Taylor, President and Chief Executive Officer. "Our experienced team of local bankers delivered strong net loan growth of 17.7% in 2015. The loan growth contributed to a 66.2% increase in net income in 2015 as compared to 2014 and we continue to balance our growth with outstanding operational execution. For 2015, we achieved a return on average assets of 1.01% as compared to 0.68% in 2014. We have also improved our efficiency ratio to 60.2% during 2015 as compared to 65.6% during 2014. Our solid results for the year demonstrate the success we are having executing our strategic plans and position us well heading into 2016."

The Company's net income increased $4.7 million for the fourth quarter 2015, as compared to the same quarter in the prior year, primarily due to a $2.1 million increase in interest income and the absence of a $5.5 million penalty paid during the fourth quarter of 2014 related to the prepayment of $90.0 million in Federal Home Loan Bank term advances "Fourth Quarter 2014 FHLB Penalty". These improvements were partially offset by a $2.7 million increase in income taxes due to higher pretax income. The $2.1 million increase in interest income was primarily due to a $287.3 million increase in average loans for the quarter ended December 31, 2015 as compared to the same quarter in 2014.

For the year ended December 31, 2015, net income increased $8.9 million, as compared to the prior year, due to a $6.8 million increase in interest income, a $1.4 million decrease in interest expense, a $0.5 million increase in noninterest income and a $5.4 million decrease in noninterest expense. These improvements were partially offset by a $5.0 million increase in income taxes due to higher pretax income. The $6.8 million increase in interest income was the result of a $236.4 million increase in average loans for the year ended December 31, 2015 as compared to the year ended December 31, 2014. The $1.4 million decrease in interest expense was primarily related to the Fourth Quarter 2014 FHLB Penalty, as discussed above. The $0.5 million increase in noninterest income was mostly due to a $0.8 million increase in investment management and trust income for the year ended December 31, 2015 as compared to the same period in 2014. The $5.4 million decrease in noninterest expense for the year ended December 31, 2015 as compared to the year ended December 31, 2014 was primarily due to the absence of the Fourth Quarter 2014 FHLB Penalty.

   
Key Financial Measures  
Income Statement  
  Quarter Ended     Year Ended  
  December 31,     September 30,     December 31,     December 31,     December 31,  
  2015     2015     2014     2015     2014  
  (Dollars in thousands, except per share amounts)  
Net income $ 5,891     $ 6,002     $ 1,215     $ 22,454     $ 13,512  
Earnings per common share - basic $ 0.28     $ 0.28     $ 0.06     $ 1.07     $ 0.64  
Return on average assets   1.00 %     1.05 %     0.23 %     1.01 %     0.68 %
Return on average equity   10.55 %     10.99 %     2.32 %     10.42 %     6.72 %
Net interest margin   3.58 %     3.59 %     3.61 %     3.67 %     3.66 %
Efficiency ratio (1)   59.55 %     58.75 %     64.03 %     60.20 %     65.56 %
________________                                      
                                       

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

Fourth quarter 2015 earnings per share remained the same as the third quarter 2015. Fourth quarter 2015 return on average assets was 1.00%, as compared to 1.05% in the third quarter 2015. Average earnings assets increased by $59.3 million during the fourth quarter 2015, primarily due to loan growth. As net interest margin remained relatively flat during the quarter, the quarterly variance in the return on average assets was primarily due to a combination of a $0.3 million increase in salary and benefit expense and a $0.1 million decrease in noninterest income in the fourth quarter 2015 as compared to the third quarter 2015. These variances were partially offset by a decrease in tax expense related to these two items. The fourth quarter 2015 increase in salary and benefit expense compared to the third quarter 2015 was mostly due to an additional accrual for bonus and incentive expense due to the Company's strong performance during 2015. The decrease in noninterest income in the fourth quarter 2015 as compared to the third quarter 2015 was primarily due to normal volatility of gains on sales of small business administration (SBA) loans.

 
Balance Sheet
  December 31,   September 30,   Percent   December 31,   Percent
  2015   2015   Change   2014   Change
  (Dollars in thousands, except per share amounts)
Total investments $ 424,692     $ 433,299     (2.0) %   $ 449,482     (5.5) %
Total loans, net of deferred costs and fees   1,814,536       1,726,151     5.1 %     1,541,434     17.7 %
Allowance for loan losses   (23,000 )     (22,890 )   0.5 %     (22,490 )   2.3 %
Total assets   2,368,525       2,285,630     3.6 %     2,124,778     11.5 %
Total deposits   1,801,845       1,847,329     (2.5) %     1,685,324     6.9 %
Book value per common share   10.21       10.07     1.4 %     9.57     6.7 %
Tangible book value per common share   9.97       9.81     1.6 %     9.24     7.9 %
Equity ratio - GAAP   9.36 %     9.57 %   (2.2) %     9.74 %   (3.9) %
Tangible common equity ratio   9.16 %     9.35 %   (2.0) %     9.43 %   (2.9) %
Total risk-based capital ratio   13.24 %     13.39 %   (1.1) %     13.85 %   (4.4) %
Assets under management and administration $ 698,247     $ 686,662     1.7 %   $ 683,138     2.2 %
                                   
                                   
Net Interest Income and Margin
    Quarter Ended       Year Ended  
    December 31,     September 30,     December 31,       December 31,     December 31,  
    2015     2015     2014       2015     2014  
    (Dollars in thousands)  
Net interest income $  19,856    $  19,406    $  17,680      $  76,979    $  68,813   
Average earning assets    2,201,096       2,141,807       1,941,028         2,098,995       1,882,194   
Interest rate spread    3.43  %    3.45  %    3.40  %      3.53  %    3.45  %
Net interest margin    3.58  %    3.59  %    3.61  %      3.67  %    3.66  %
Net interest margin, fully tax equivalent    3.66  %    3.67  %    3.69  %      3.75  %    3.74  %
Average cost of interest-bearing liabilities                                
  (including noninterest-bearing deposits)    0.30  %    0.28  %    0.37  %      0.27  %    0.37  %
Average cost of deposits                                
  (including noninterest-bearing deposits)    0.20  %    0.19  %    0.16  %      0.18  %    0.16  %
                                 

Net interest income increased $2.2 million in the fourth quarter 2015, as compared to the same quarter in 2014, due to a $2.1 million increase in interest income and a $0.1 million decrease in interest expense. The increase in interest income was primarily the result of a 19.4% increase in average loan balances in the fourth quarter 2015 as compared to the same quarter in 2014.

In the fourth quarter 2015, net interest income increased $0.5 million as compared to the third quarter 2015, due to a $0.6 million increase in interest income, partially offset by a $0.1 million increase in interest expense. The increase in interest income during the fourth quarter 2015, as compared to the third quarter 2015, was primarily due to a $65.8 million increase in average loan balances. The increase in interest expense during the fourth quarter 2015, as compared to the third quarter 2015, was due to a $35.1 million increase in average interest-bearing deposits and an increase in the average cost of borrowings.

Net interest income increased by $8.2 million, to $77.0 million for the year ended December 31, 2015, as compared to $68.8 million in 2014. The increase in net interest income during 2015 was attributable to a $6.8 million increase in interest income and a $1.4 million decrease in interest expense. The year-over-year increase in interest income was driven by a $236.4 million increase in average loans as compared to 2014. The decline in interest expense during 2015, as compared to the prior year, was primarily due to the Fourth Quarter 2014 FHLB Penalty. During 2015, the Company recognized a one basis point expansion in net interest margin to 3.67%, which was primarily the result of the decline in the average cost of borrowings, discussed above.

 
Noninterest Income
 
The following table presents noninterest income as of the dates indicated:
 
  Quarter Ended   Year Ended
  December 31,
2015
  September 30,
2015
  December 31,
2014
  December 31,
2015
  December 31,
2014
  (In thousands)
Noninterest income:                            
  Deposit service and other fees $ 2,259   $ 2,309   $ 2,358   $ 8,941   $ 9,066
  Investment management and trust   1,225     1,292     1,231     5,189     4,380
  Increase in cash surrender value of life insurance   442     447     418     1,758     1,295
  Gain on sale of securities   132     -     -     132     28
  Gain on sale of SBA loans   143     232     447     824     798
  Other   61     119     408     336     1,128
  Total noninterest income $ 4,262   $ 4,399   $ 4,862   $ 17,180   $ 16,695
                               

Fourth quarter 2015 noninterest income was $4.3 million as compared to $4.4 million in the third quarter 2015 and $4.9 million in the fourth quarter 2014.

Fourth quarter 2015 noninterest income declined $0.6 million, as compared to the fourth quarter 2014, primarily due to a $0.3 million decrease in other noninterest income related to non-recurring income received in 2014 and a $0.3 million decline in gains on sales of SBA loans.

For the year ended December 31, 2015, noninterest income increased $0.5 million, primarily as a result of a $0.8 million increase in investment management and trust earnings and a $0.5 million increase in earnings on bank owned life insurance (BOLI), partially offset by a $0.8 million decline in other noninterest income. The increase in investment management and trust income during 2015, as compared to 2014 was mostly due to the Company's July 2014 acquisition of an investment management firm. The increase in BOLI income was primarily the result of an additional $15.0 million in BOLI insurance purchased during the fourth quarter of 2014 and the first quarter of 2015. The decrease in other noninterest income during 2015, as compared to 2014, was comprised of a $0.3 decrease in customer interest rate swap income and a $0.3 million decrease related to non-recurring income received in 2014.

 
Noninterest Expense
 
The following table presents noninterest expense as of the dates indicated:
               
  Quarter Ended   Year Ended
  December 31,
2015
  September 30,
2015
  December 31,
2014
  December 31,
2015
  December 31,
2014
  (In thousands)
Noninterest expense:                              
  Salaries and employee benefits $ 8,643   $ 8,318     $ 8,434   $ 33,564   $ 32,766
  Occupancy expense   1,498     1,487       1,544     6,312     6,308
  Furniture and equipment   801     740       698     3,007     2,759
  Amortization of intangible assets   495     495       654     1,981     2,506
  Other real estate owned, net   16     (31 )     142     80     367
  Insurance and assessment   603     604       576     2,398     2,355
  Professional fees   700     838       927     3,220     3,520
  Prepayment penalty on debt extinguishment   -     -       5,459     -     5,459
  Impairment of long-lived assets   -     -       76     122     186
  Other general and administrative   2,491     2,415       2,524     9,655     9,520
  Total noninterest expense $ 15,247   $ 14,866     $ 21,034   $ 60,339   $ 65,746
                               

Noninterest expense increased by $0.4 million to $15.2 million in the fourth quarter 2015 as compared to $14.9 million in the third quarter 2015, and decreased $5.8 million as compared to the same quarter in 2014. The increase in noninterest expense as compared to the third quarter 2015 was primarily attributable to a $0.3 million increase in salaries and employee benefits, specifically related to incentive compensation. Excluding the Fourth Quarter 2014 FHLB Penalty, fourth quarter 2015 noninterest expense increased by $0.3 million as compared to the fourth quarter 2014. The Company's tax equivalent efficiency ratio was 59.55% for the fourth quarter 2015, as compared to 58.75% for the third quarter 2015, and 64.03% for the fourth quarter 2014.

Noninterest expense was $60.3 million for the year ended December 31, 2015, a decrease of $5.4 million as compared to $65.7 million in 2014, primarily due to the Fourth Quarter 2014 FHLB Penalty. During 2015, salaries and employee benefits increased $0.8 million mostly due to an increase in incentive compensation, resulting from the continued strong financial performance of the Company.

 
Balance Sheet
                   
  December 31,   September 30,   Percent   December 31,   Percent
  2015   2015   Change   2014   Change
  (Dollars in thousands)
Total assets $ 2,368,525     $ 2,285,630     3.6 %   $ 2,124,778   11.5 %
Average assets, quarter-to-date   2,327,224       2,268,603     2.6 %     2,067,371   12.6 %
Total loans, net of deferred costs and fees   1,814,536       1,726,151     5.1 %     1,541,434   17.7 %
Total deposits   1,801,845       1,847,329     (2.5) %     1,685,324   6.9 %
                                 
Equity ratio - GAAP   9.36 %     9.57 %   (2.2) %     9.74   % (3.9) %
Tangible common equity ratio   9.16 %     9.35 %   (2.0) %     9.43   % (2.9) %

At December 31, 2015, the Company had total assets of $2.4 billion, reflecting an $82.9 million increase as compared to September 30, 2015, and a $243.7 million increase as compared to December 31, 2014. The increase in total assets during 2015 was primarily comprised of growth in net loans of $273.1 million, partially offset by a $24.8 million decrease in total investments and a $5.7 million decrease in cash. The increase in total assets was primarily funded by a $116.5 million increase in total deposits, a $113.5 million increase in securities sold under agreements to repurchase and borrowings and a $14.7 million net increase in equity.

 
The following table sets forth the amount of loans outstanding at the dates indicated:
                   
  December 31,   September 30,   June 30,   March 31,   December 31,
  2015   2015   2015   2015   2014
  (In thousands)
Loans held for sale $ -   $ 8   $ 423     $ 700     $ -  
Commercial and residential real estate   1,281,701     1,196,209     1,146,508       1,055,219       1,049,315  
Construction   107,170     92,473     85,516       72,505       66,634  
Commercial   323,552     336,414     333,860       326,679       324,057  
Agricultural   9,294     10,991     12,380       10,625       10,625  
Consumer   66,288     63,517     61,870       60,008       60,155  
SBA   25,645     25,911     26,975       27,419       30,025  
Other   631     510     1,299       2,133       1,002  
  Total gross loans   1,814,281     1,726,033     1,668,831       1,555,288       1,541,813  
    Deferred costs and (fees)   255     118     (173 )     (134 )     (379 )
  Loans, net of deferred costs and fees $ 1,814,536   $ 1,726,151   $ 1,668,658     $ 1,555,154     $ 1,541,434  
                                   
                                   
The following table presents the changes in our loan balances at the dates indicated:
                   
  December 31,   September 30,   June 30,   March 31,   December 31,
  2015   2015   2015   2015   2014
  (In thousands)
Beginning balance $ 1,726,151     $ 1,668,658     $ 1,555,154     $ 1,541,434     $ 1,482,268  
New credit extended   155,745       149,502       169,687       95,738       106,718  
Net existing credit advanced   61,165       60,784       83,792       57,900       71,815  
Net pay-downs and maturities   (129,189 )     (152,279 )     (138,770 )     (141,983 )     (119,854 )
Charge-offs and other   664       (514 )     (1,205 )     2,065       487  
  Loans, net of deferred costs and fees $ 1,814,536     $ 1,726,151     $ 1,668,658     $ 1,555,154     $ 1,541,434  
                                       
Net change - loans outstanding $ 88,385     $ 57,493     $ 113,504     $ 13,720     $ 59,166  
                                       

During the fourth quarter 2015, loans net of deferred costs and fees increased $88.4 million which was comprised of an $85.5 million increase in commercial and residential real estate loans and a $14.7 million increase in construction loans, partially offset by a $12.9 million decline in commercial loans, primarily energy related. Fourth quarter 2015 net loan growth consisted of $216.9 million in new loans and net existing credit advanced, partially offset by $129.2 million in net loan pay-downs and maturities. In addition to contractual loan principal payments and maturities, the fourth quarter 2015 included $25.2 million in early payoffs related to the sale of the borrower's assets, $19.0 million in payoffs due to our strategic decision to not match certain financing terms offered by competitors, $11.5 million in pay-downs related to revolving line of credit fluctuations and $11.2 million in pay-downs of energy-related loans.

During the fourth quarter 2015, we continued to proactively reduce our direct exposure to the energy industry, realizing reductions of 46.8%, or $24.2 million, in commitments and 49.5%, or $11.2 million, in outstanding loan balances. As compared to December 31, 2014, our direct exposure to the energy industry has declined by 74.7%, or $81.5 million, in commitments and by 80.6%, or $47.2 million, in outstanding loan balances. Our current energy portfolio consists of four relationships totaling $11.4 million in outstanding loan balances, which is less than 1.0% of our total loan portfolio. At December 31, 2015, the energy portfolio was comprised entirely of exploration and production loans, with relatively equal exposure to oil and natural gas.

For the year ended December 31, 2015, loans net of deferred costs and fees increased by $273.1 million, or 17.7%. Net loan growth was comprised of a $232.4 million increase in commercial and residential real estate loans and a $40.5 million increase in construction loans. The growth in loans was the result of the development of new customer relationships and growth in existing customer relationships. The utilization rate on commercial lines of credit was 41.2% at December 31, 2015 as compared to 41.0% at December 31, 2014.

At December 31, 2015, 1-4 family residential real estate loans were $349.1 million, as compared to $302.9 million at September 30, 2015, and $262.7 million as of December 31, 2014. The fourth quarter and annual growth in 1-4 family residential real estate loans was mostly due to growth in jumbo mortgage loans.

 
The following table sets forth the amounts of deposits outstanding at the dates indicated:
                   
  December 31,   September 30,   June 30,   March 31,   December 31,
  2015   2015   2015   2015   2014
  (In thousands)
Noninterest-bearing demand $ 612,371   $ 683,797   $ 622,364   $ 659,765   $ 654,051
Interest-bearing demand and NOW   381,834     405,092     379,495     356,573     326,748
Money market   397,371     369,023     362,798     370,705     374,063
Savings   151,130     144,602     139,305     141,948     138,588
Time   259,139     244,815     238,037     192,890     191,874
Total deposits $ 1,801,845   $ 1,847,329   $ 1,741,999   $ 1,721,881   $ 1,685,324
                             

At December 31, 2015, non-maturing deposits were $1.5 billion, an increase of $49.3 million as compared to December 31, 2014, and a decrease of $59.8 million as compared to September 30, 2015. Non-maturing deposits increased significantly during the third quarter 2015 due to seasonal cash fluctuations of various commercial customers. Many of these same customers withdrew a portion of their balances during the fourth quarter 2015, which resulted in the decline in non-maturing deposits during the fourth quarter 2015 as compared to the third quarter 2015. During 2015, non-maturing deposits grew 3.3% as compared to the prior year. At December 31, 2015, noninterest-bearing deposits as a percentage of total deposits were 34.0%, as compared to 37.0% at September 30, 2015, and 38.8% at December 31, 2014.

At December 31, 2015, securities sold under agreements to repurchase were $26.5 million, a decrease of $7.0 million as compared to December 31, 2014, and a decrease of $3.7 million as compared to September 30, 2015.

Total FHLB borrowings were $280.8 million at December 31, 2015 consisting of $185.8 million of overnight advances on our subsidiary bank, Guaranty Bank and Trust Company's (Bank) line of credit and $95.0 million in term advances. At December 31, 2014, total FHLB borrowings consisted of $140.3 million in overnight advances and $20.0 million in term advances.

Regulatory Capital Ratios
 
The following table provides the capital ratios of the Company and the Bank as of the dates presented, along with the applicable regulatory capital requirements:
               
  Ratio at
December 31,
2015
  Ratio at
December 31,
2014
  Minimum
Capital
Requirement at
December 31, 2015
  Minimum
Requirement for
"Well-Capitalized"
Institution at
December 31, 2015
Common Equity Tier 1 Risk-Based Capital Ratio                      
  Consolidated 10.94 %   N/A     4.50 %   N/A  
  Guaranty Bank and Trust Company 11.96 %   N/A     4.50 %   6.50 %
                       
Tier 1 Risk-Based Capital Ratio                      
  Consolidated 12.11 %   12.60 %   6.00 %   N/A  
  Guaranty Bank and Trust Company 11.96 %   12.33 %   6.00 %   8.00 %
                       
Total Risk-Based Capital Ratio                      
  Consolidated 13.24 %   13.85 %   8.00 %   N/A  
  Guaranty Bank and Trust Company 13.09 %   13.58 %   8.00 %   10.00 %
                       
Leverage Ratio                      
  Consolidated 10.68 %   11.10 %   4.00 %   N/A  
  Guaranty Bank and Trust Company 10.55 %   10.86 %   4.00 %   5.00 %
                       

At December 31, 2015, all of our regulatory capital ratios remain well above minimum requirements for a "well-capitalized" institution. Our ratios decreased as compared to our ratios at December 31, 2014 primarily due to an increase in risk-weighted assets during the year, driven primarily by loan growth in addition to new risk-weighting requirements under the final rule on Enhanced Regulatory Capital Standards, commonly referred to as Basel III, which became effective in the first quarter of 2015.

Asset Quality

The following table presents select asset quality data, including quarterly charged-off loans, recoveries and provision (credit) for loans losses are presented for each of the dates indicated:

                   
                   
  December 31,   September 30,   June 30,   March 31,   December 31,
  2015   2015   2015   2015   2014
  (Dollars in thousands)
Nonaccrual loans and leases $ 14,474     $ 14,512     $ 13,192     $ 13,266     $ 12,617  
Accruing loans past due 90 days or more (1)   -       -       -       -       -  
                                       
Total nonperforming loans (NPLs) $ 14,474     $ 14,512     $ 13,192     $ 13,266     $ 12,617  
Other real estate owned and foreclosed assets   674       1,371       1,503       2,175       2,175  
                                       
Total nonperforming assets (NPAs) $ 15,148     $ 15,883     $ 14,695     $ 15,441     $ 14,792  
                                       
Total classified assets $ 26,428     $ 31,208     $ 31,762     $ 28,637     $ 27,271  
                                       
Accruing loans past due 30-89 days (1) $ 2,091     $ 3,461     $ 1,487     $ 8,368     $ 1,381  
                                       
Charged-off loans $ (66 )   $ (75 )   $ (48 )   $ (49 )   $ (73 )
Recoveries   184       101       285       82       214  
  Net recoveries $ 118     $ 26     $ 237     $ 33     $ 141  
                                       
Provision (credit) for loan losses $ (8 )   $ 14     $ 113     $ (23 )   $ (1 )
                                       
Allowance for loan losses $ 23,000     $ 22,890     $ 22,850     $ 22,500     $ 22,490  
                                       
Selected ratios:                                      
NPLs to loans, net of deferred costs and fees (2)   0.80 %     0.84 %     0.79 %     0.85 %     0.82 %
NPAs to total assets   0.64 %     0.69 %     0.65 %     0.72 %     0.70 %
Allowance for loan losses to NPLs   158.91 %     157.73 %     173.21 %     169.61 %     178.25 %
Allowance for loan losses to loans, net of deferred costs and fees (2)   1.27 %     1.33 %     1.37 %     1.45 %     1.46 %
Loans 30-89 days past due to loans, net of deferred costs and fees (2)   0.12 %     0.20 %     0.09 %     0.54 %     0.09 %
Texas ratio (3)   5.65 %     6.09 %     5.80 %     6.07 %     6.01 %
Classified asset ratio (4)   11.66 %     13.51 %     13.87 %     11.26 %     11.08 %

______________________________________

(1) Past due loans include both loans that are past due with respect to payments and loans that are past due because the loan has matured, and is in the process of renewal, but continues to be current with respect to payments.
(2) Loans, net of deferred costs and fees, exclude loans held for sale.
(3) Texas ratio is defined as total NPAs divided by subsidiary bank only Tier 1 Capital plus allowance for loan losses.
(4) Classified asset ratio is defined as total classified assets to subsidiary bank only Tier 1 Capital plus allowance for loan losses.
   
   

The following tables summarize past due loans held for investment by class as of the dates indicated:

December 31, 2015   30-89
Days Past
Due
  90 Days +
Past Due
and Still
Accruing
  Nonaccrual   Total Nonaccrual and
Past Due
  Total Loans,
Held for
Investment
    (In thousands)
Commercial and residential real estate   $ 653   $ -   $ 11,905   $ 12,558   $ 1,281,881
Construction     -     -     986     986     107,185
Commercial     1,147     -     874     2,021     323,598
Consumer     291     -     459     750     66,297
Other     -     -     250     250     35,575
Total   $ 2,091   $ -   $ 14,474   $ 16,565   $ 1,814,536
                               
December 31, 2014   30-89
Days Past
Due
  90 Days +
Past Due
and Still
Accruing
  Nonaccrual   Total Nonaccrual and
Past Due
  Total Loans,
Held for
Investment
    (In thousands)
Commercial and residential real estate   $ 92   $ -   $ 11,872   $ 11,964   $ 1,049,057
Construction     -     -     -     -     66,618
Commercial     1,080     -     18     1,098     323,977
Consumer     66     -     559     625     60,140
Other     143     -     168     311     41,642
Total   $ 1,381   $ -   $ 12,617   $ 13,998   $ 1,541,434
                               

During the fourth quarter 2015, nonperforming assets decreased by $0.7 million from September 30, 2015 and increased by $0.4 million from December 31, 2014. The decrease in nonperforming assets at December 31, 2015 as compared to September 30, 2015 was primarily the result of the sale of a single OREO property valued at $0.7 million as of September 30, 2015. The $0.4 million increase in nonperforming assets as of December 31, 2015, as compared to December 31, 2014, was the result of three loans with an aggregate principal balance of $2.7 million which were moved to nonaccrual status during 2015, partially offset by a $1.5 million decline in OREO during the year. As of December 31, 2015, nonperforming loans included one out-of-state loan participation with a balance of $9.5 million.

At December 31, 2015, classified assets represent 11.7% of bank-level Tier 1 risk-based capital plus allowance for loan losses, as compared to 13.5% at September 30, 2015, and 11.1% at December 31, 2014.

Net recoveries in fourth quarter 2015 were $0.1 million as compared to an immaterial amount of net recoveries in the third quarter 2015, and net recoveries of $0.1 million in the fourth quarter 2014. The Bank considered recoveries, historical charge-offs, level of nonperforming loans, loan growth and other factors when determining the adequacy of the allowance for loan losses and the resulting amount of loan loss provision to be recognized during the quarter.

Shares Outstanding

As of December 31, 2015, the Company had 21,704,852 shares of common stock outstanding, consisting of 20,685,852 shares of voting common stock, of which 590,755 shares were in the form of unvested stock awards, and 1,019,000 shares of non-voting common stock.

Non-GAAP Financial Measures

The Company discloses certain non-GAAP financial measures related to tangible assets, including tangible book value and tangible common equity, pre-tax operating earnings adjusted for (if any) provision (credit) for loan losses, OREO expenses, debt termination expense, impairments of long-lived assets and securities gains and losses.

The Company discloses these non-GAAP financial measures to provide meaningful supplemental information regarding the Company's operational performance and to enhance investors' overall understanding of the Company's core financial performance. Management believes that these non-GAAP financial measures allow for additional transparency and are used by some investors, analysts and other users of the Company's financial information as performance measures. These non-GAAP financial measures are presented for supplemental informational purposes only and should not be considered a substitute for financial information presented in accordance with GAAP. These non-GAAP financial measures presented by the Company may be different from non-GAAP financial measures used by other companies.

The following non-GAAP schedule reconciles the non-GAAP pre-tax operating earnings to GAAP net income before income taxes as of the dates indicated:

               
               
  Quarter Ended   Year Ended
  December 31, September 30, December 31,   December 31,   December 31,
  2015 2015 2014   2015   2014
               
  (Dollars in thousands, except per share amounts)
Income before income taxes $ 8,879   $ 8,925   $ 1,509     $ 33,724     $ 19,748  
Adjusted for:                                  
  Provision (credit) for loan losses   (8 )   14     (1 )     96       14  
  Expenses (gains) related to other real estate owned, net   16     (31 )   142       80       367  
  Prepayment penalty on debt extinguishment   -     -     5,459       -       5,459  
  Impairment of long-lived assets   -     -     76       122       186  
  Gain on sale of securities   (132 )   -     -       (132 )     (28 )
Pre-tax operating earnings $ 8,755   $ 8,908   $ 7,185     $ 33,890     $ 25,746  
                                   
Weighted basic average common shares outstanding:   21,077,889     21,076,380     20,968,551       21,065,590       20,957,702  
Fully diluted average common                                  
shares outstanding:   21,303,763     21,224,989     21,114,680       21,272,336       21,086,543  
                                   
Pre-tax operating earnings per common share-basic: $ 0.42   $ 0.42   $ 0.34     $ 1.61     $ 1.23  
Pre-tax operating earnings per common share-diluted: $ 0.41   $ 0.42   $ 0.34     $ 1.59     $ 1.22  
                                   
                                   

The following non-GAAP schedules reconcile the book value per share to the tangible book value per share and the GAAP equity ratio to the tangible equity ratio as of the dates indicated:

             
             
Tangible Book Value per Common Share            
    December 31,   September 30,   December 31,
    2015   2015   2014
    (Dollars in thousands, except per share amounts)
  Total stockholders' equity   $ 221,639     $ 218,803     $ 206,939  
  Less: Intangible assets     (5,173 )     (5,668 )     (7,154 )
  Tangible common equity   $ 216,466     $ 213,135     $ 199,785  
                           
  Number of common shares outstanding     21,704,852       21,728,202       21,628,873  
                           
  Book value per common share   $ 10.21     $ 10.07     $ 9.57  
  Tangible book value per common share   $ 9.97     $ 9.81     $ 9.24  
                           
                           
Tangible Common Equity Ratio            
    December 31,   September 30,   December 31,
    2015   2015   2014
    (Dollars in thousands)
  Total stockholders' equity   $ 221,639     $ 218,803     $ 206,939  
  Less: Intangible assets     (5,173 )     (5,668 )     (7,154 )
  Tangible common equity   $ 216,466     $ 213,135     $ 199,785  
                           
  Total assets   $ 2,368,525     $ 2,285,630     $ 2,124,778  
  Less: Intangible assets     (5,173 )     (5,668 )     (7,154 )
  Tangible assets   $ 2,363,352     $ 2,279,962     $ 2,117,624  
                           
  Equity ratio - GAAP (total stockholders' equity / total assets)     9.36 %     9.57 %     9.74 %
  Tangible common equity ratio (tangible common equity / tangible assets)     9.16 %     9.35 %     9.43 %
                         
                         

The following non-GAAP schedule reconciles the following GAAP measures to net income, earnings per share and ROAA excluding the impact of the net Fourth Quarter 2014 FHLB Penalty for the periods presented:

  Quarter Ended   Year Ended
  December 31,   December 31,   December 31,   December 31,
  2015   2014   2015   2014
  (Dollars in thousands, except per share amounts)
Net income $ 5,891     $ 1,215     $ 22,454     $ 13,512  
Adjusted for:                              
  Prepayment penalty on debt extinguishment   -       5,459       -       5,459  
  Tax effect on prepayment penalty   -       (2,075 )     -       (2,075 )
Net income excluding prepayment penalty $ 5,891     $ 4,599     $ 22,454     $ 16,896  
                               
Average assets $ 2,327,224     $ 2,067,371     $ 2,226,794     $ 2,001,552  
                               
Weighted basic average common shares outstanding:   21,077,889       20,968,551       21,065,590       20,957,702  
Fully diluted average common shares outstanding:   21,303,763       21,114,680       21,272,336       21,086,543  
                               
ROAA (GAAP)   1.00 %     0.23 %     1.01 %     0.68 %
ROAA (excluding prepayment penalty)   1.00 %     0.88 %     1.01 %     0.84 %
                               
Earnings per common share-basic: $ 0.28     $ 0.06     $ 1.07     $ 0.64  
Earnings per common share-basic (excluding prepayment penalty):                              
                               
Earnings per common share-diluted: $ 0.28     $ 0.06     $ 1.06     $ 0.64  
Earnings per common share-diluted (excluding prepayment penalty):   0.28       0.22       1.06       0.80  
                               

About Guaranty Bancorp

Guaranty Bancorp is a $2.4 billion financial services company that operates as the bank holding company for Guaranty Bank and Trust Company, a premier Colorado community bank. The Bank provides comprehensive financial solutions to consumers and small to medium-sized businesses that value local and personalized service. In addition to loans and depository services, the Bank also offers wealth management solutions, including trust and investment management services. More information about Guaranty Bancorp can be found at www.gbnk.com.

Forward-Looking Statements

This press release contains forward-looking statements, which are included in accordance with the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "could," "expects," "plans," "intends," "anticipates," "believes," "estimates," "predicts," "potential," or "continue," or the negative of such terms and other comparable terminology. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following: failure to maintain adequate levels of capital and liquidity to support the Company's operations; general economic and business conditions in those areas in which the Company operates, including the impact of global and national economic conditions on our local economy; demographic changes; competition; fluctuations in interest rates; continued ability to attract and employ qualified personnel; ability to receive regulatory approval for the bank subsidiary to declare dividends to the Company; adequacy of the allowance for loan losses, changes in credit quality and the effect of credit quality on the provision for credit losses and allowance for loan losses; changes in governmental legislation or regulation, including, but not limited to, any increase in FDIC insurance premiums; changes in accounting policies and practices; changes in business strategy or development plans; changes in the securities markets; changes in consumer spending, borrowing and savings habits; the availability of capital from private or government sources; competition for loans and deposits and failure to attract or retain loans and deposits; failure to recognize expected cost savings; changes in the financial performance and/or condition of our borrowers and the ability of our borrowers to perform under the terms of their loans and terms of other credit agreements; changes in oil and natural gas prices; 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 any forward-looking statement can be achieved and readers are cautioned not to place undue reliance on such statements, which speak only as of the date made. The forward-looking statements are made as of the date of this press release, and, except as may otherwise be required by law, the Company does not intend, and assumes no obligation, to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements.

 
 
GUARANTY BANCORP AND SUBSIDIARIES
Unaudited Consolidated Balance Sheets
             
    December 31,   September 30,   December 31,
    2015   2015   2014
    (In thousands)
Assets                        
Cash and due from banks   $ 26,711     $ 23,750     $ 32,441  
                         
Securities available for sale, at fair value     255,431       276,353       346,146  
Securities held to maturity     148,761       140,928       88,514  
Bank stocks, at cost     20,500       16,018       14,822  
      Total investments     424,692       433,299       449,482  
                         
Loans held for sale     -       8       -  
                         
Loans, held for investment, net of deferred costs and fees     1,814,536       1,726,143       1,541,434  
  Less allowance for loan losses     (23,000 )     (22,890 )     (22,490 )
      Net loans, held for investment     1,791,536       1,703,253       1,518,944  
                         
Premises and equipment, net     48,308       48,564       45,937  
Other real estate owned and foreclosed assets     674       1,371       2,175  
Other intangible assets, net     5,173       5,668       7,154  
Bank owned life insurance     48,909       48,537       42,456  
Other assets     22,522       21,180       26,189  
      Total assets   $ 2,368,525     $ 2,285,630     $ 2,124,778  
                         
Liabilities and Stockholders' Equity                        
Liabilities:                        
  Deposits:                        
    Noninterest-bearing demand   $ 612,371     $ 683,797     $ 654,051  
    Interest-bearing demand and NOW     381,834       405,092       326,748  
    Money market     397,371       369,023       374,063  
    Savings     151,130       144,602       138,588  
    Time     259,139       244,815       191,874  
      Total deposits     1,801,845       1,847,329       1,685,324  
Securities sold under agreement to repurchase and federal funds purchased     26,477       30,151       33,508  
Federal Home Loan Bank term notes     95,000       95,000       20,000  
Federal Home Loan Bank line of credit borrowing     185,847       56,300       140,300  
Subordinated debentures     25,774       25,774       25,774  
Interest payable and other liabilities     11,943       12,273       12,933  
      Total liabilities     2,146,886       2,066,827       1,917,839  
                         
Stockholders' equity:                        
  Common stock and additional paid-in capital - common stock     712,334       711,610       709,365  
  Accumulated deficit     (382,147 )     (385,930 )     (396,172 )
  Accumulated other comprehensive loss     (4,805 )     (3,421 )     (3,127 )
  Treasury stock     (103,743 )     (103,456 )     (103,127 )
      Total stockholders' equity     221,639       218,803       206,939  
      Total liabilities and stockholders' equity   $ 2,368,525     $ 2,285,630     $ 2,124,778  
                               
                               
GUARANTY BANCORP AND SUBSIDIARIES
Unaudited Consolidated Statements of Operations
               
  Quarter Ended December 31,   Year Ended December 31,
  2015   2014   2015   2014
  (In thousands, except share and per share data)
Interest income:                          
  Loans, including costs and fees $ 18,439     $ 16,311     $ 70,188   $ 62,819
  Investment securities:                          
    Taxable   2,060       2,183       8,325     9,178
    Tax-exempt   719       701       2,852     2,708
  Dividends   235       185       959     807
  Federal funds sold and other   1       4       6     8
    Total interest income   21,454       19,384       82,330     75,520
Interest expense:                          
  Deposits   923       667       3,207     2,464
  Securities sold under agreement to repurchase and federal funds purchased   14       13       45     40
  Borrowings   453       823       1,285     3,403
  Subordinated debentures   208       201       814     800
    Total interest expense   1,598       1,704       5,351     6,707
    Net interest income   19,856       17,680       76,979     68,813
Provision (credit) for loan losses   (8 )     (1 )     96     14
    Net interest income, after provision for loan losses   19,864       17,681       76,883     68,799
Noninterest income:                          
  Deposit service and other fees   2,259       2,358       8,941     9,066
  Investment management and trust   1,225       1,231       5,189     4,380
  Increase in cash surrender value of life insurance   442       418       1,758     1,295
  Gain on sale of securities   132       -       132     28
  Gain on sale of SBA loans   143       447       824     798
  Other   61       408       336     1,128
    Total noninterest income   4,262       4,862       17,180     16,695
Noninterest expense:                          
  Salaries and employee benefits   8,643       8,434       33,564     32,766
  Occupancy expense   1,498       1,544       6,312     6,308
  Furniture and equipment   801       698       3,007     2,759
  Amortization of intangible assets   495       654       1,981     2,506
  Other real estate owned, net   16       142       80     367
  Insurance and assessments   603       576       2,398     2,355
  Professional fees   700       927       3,220     3,520
  Prepayment penalty on debt extinguishment   -       5,459       -     5,459
  Impairment of long-lived assets   -       76       122     186
  Other general and administrative   2,491       2,524       9,655     9,520
    Total noninterest expense   15,247       21,034       60,339     65,746
    Income before income taxes   8,879       1,509       33,724     19,748
Income tax expense   2,988       294       11,270     6,236
    Net income $ 5,891     $ 1,215     $ 22,454   $ 13,512
                           
Earnings per common share-basic: $ 0.28     $ 0.06     $ 1.07   $ 0.64
Earnings per common share-diluted:   0.28       0.06       1.06     0.64
                           
Dividend declared per common share: $ 0.10     $ 0.05     $ 0.40   $ 0.20
                           
Weighted average common shares outstanding-basic:   21,077,889       20,968,551       21,065,590     20,957,702
Weighted average common shares outstanding-diluted:   21,303,763       21,114,680       21,272,336     21,086,543
                           
                           
GUARANTY BANCORP AND SUBSIDIARIES
Unaudited Consolidated Average Balance Sheets
                   
  QTD Average   YTD Average
  December 31,   September 30,   December 31,   December 31,   December 31,
  2015   2015   2014   2015   2014
Assets (In thousands)
Interest earning assets                            
  Loans, net of deferred costs and fees $ 1,769,010   $ 1,703,218   $ 1,481,748   $ 1,655,857   $ 1,419,483
  Securities   429,971     436,643     452,200     441,046     459,451
  Other earning assets   2,115     1,946     7,080     2,092     3,260
Average earning assets   2,201,096     2,141,807     1,941,028     2,098,995     1,882,194
Other assets   126,128     126,796     126,343     127,799     119,358
Total average assets $ 2,327,224   $ 2,268,603   $ 2,067,371   $ 2,226,794   $ 2,001,552
                             
Liabilities and Stockholders' Equity                            
Average liabilities:                            
Average deposits:                            
  Noninterest-bearing deposits $ 648,903   $ 637,184   $ 637,551   $ 642,015   $ 585,671
  Interest-bearing deposits   1,194,964     1,159,829     1,034,401     1,119,309     997,183
  Average deposits   1,843,867     1,797,013     1,671,952     1,761,324     1,582,854
Other interest-bearing liabilities   246,959     242,330     175,203     236,568     207,762
Other liabilities   14,883     12,518     12,192     13,389     9,854
Total average liabilities   2,105,709     2,051,861     1,859,347     2,011,281     1,800,470
Average stockholders' equity   221,515     216,742     208,024     215,513     201,082
Total average liabilities and stockholders' equity $ 2,327,224   $ 2,268,603   $ 2,067,371   $ 2,226,794   $ 2,001,552

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

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


Source: Marketwired (Canada) (January 27, 2016 - 4:10 PM EST)

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