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 October 14, 2015 - 4:10 PM EDT
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Guaranty Bancorp Announces 2015 Third Quarter Financial Results

DENVER, CO--(Marketwired - October 14, 2015) -

  • Expanded quarterly net income by 28.5% as compared to the third quarter 2014
  • Increased quarterly return on average assets to 1.05% as compared to 0.91% in the third quarter 2014
  • Grew loans by 16.5%, as compared to September 30, 2014
  • Increased core deposits by 9.0%, as compared to September 30, 2014
  • Improved the efficiency ratio to 58.8% during the quarter as compared to 63.7% in the third quarter 2014

Guaranty Bancorp (NASDAQ: GBNK) ("we", "our" or "the Company"), a community bank holding company based in Colorado, today announced third quarter 2015 net income of $6.0 million or $0.28 per basic and diluted common share, an increase of $1.3 million or $0.06 per basic and diluted common share as compared to the third quarter 2014. For the nine months ended September 30, 2015, net income was $16.6 million or $0.79 per basic common share and $0.78 per diluted common share, an increase of $4.3 million or $0.20 per basic and diluted common share as compared to the same period in 2014.

"Our consistently strong operating metrics were recognized for the second consecutive year by Sandler O'Neill in their Bank & Thrift Sm-All Star list," said Paul W. Taylor, President and CEO. "We are proud to be named one of the top 34 performing small-cap banks and thrifts in the United States and we were the only Colorado bank to receive this recognition. Our quarterly net income growth of 28.5%, as compared to the same quarter in 2014, resulted in a 14 basis point improvement in quarterly return on average assets to 1.05%. This improved profitability was the result of diligent execution of our business strategy. The sustained core deposit growth of 9.0% and strong loan growth of 16.5% for the twelve months ended September 30, 2015 reflects the confidence businesses have in the Colorado economy and the solid relationships we continue to develop."

The Company's net income increased $1.3 million for the third quarter 2015 as compared to the same quarter in the prior year, due to a $1.3 million improvement in interest income, a $0.3 million decrease in interest expense and a $0.3 million decrease in noninterest expense. These improvements were partially offset by an increase in income taxes. The $1.3 million increase in interest income was primarily due to a $240.2 million increase in average loans for the quarter ended September 30, 2015 as compared to the same quarter in 2014. The $0.3 million decrease in interest expense during the third quarter 2015, as compared to the same quarter in 2014, was primarily driven by the prepayment of $90.0 million of Federal Home Loan Bank (FHLB) term advances during the fourth quarter 2014. The $0.3 million decrease in noninterest expense was mostly due to a decrease in other real estate owned (OREO) expenses and a decrease in intangible asset amortization expense.

For the nine months ended September 30, 2015, net income increased 34.7% or $4.3 million, as compared to the same period in 2014, due to a $4.7 million increase in interest income, a $1.3 million decrease in interest expense, and a $1.1 million increase in noninterest income. These improvements were partially offset by a $0.4 million increase in noninterest expense and a $2.3 million increase in income taxes due to higher pretax income. The $4.7 million increase in interest income was the result of a $219.2 million increase in average loans for the nine months ended September 30, 2015 as compared to the same period in 2014. The $1.3 million decrease in interest expense was primarily related to the prepayment of $90.0 million of FHLB term advances, as discussed above. The $1.1 million increase in noninterest income was mostly due to a $0.8 million increase in investment management and trust income, a $0.4 million increase in bank owned life insurance (BOLI) income and a $0.3 million increase in gains on sales of SBA loans during the nine months ended September 30, 2015 as compared to the same period in 2014. The $0.4 million increase in noninterest expense was mostly due to increases in salary and benefit expense related to the creation of new positions within the Company during the nine months ended September 30, 2015 as compared to the same period in 2014.

Key Financial Measures

Income Statement

        
    Three Months Ended      Nine Months Ended  
    September 30,      June 30,      September 30,      September 30,      September 30,  
    2015      2015      2014      2015      2014  
   (Dollars in thousands, except per share amounts)              
Net income $ 6,002    $ 5,477    $ 4,671      $16,563    $ 12,297  
Earnings per common share -- basic $ 0.28    $ 0.26    $ 0.22      $0.79    $ 0.59  
Return on average assets   1.05 %    1.00 %    0.91 %    1.01 %    0.83 %
Return on average equity   10.99 %    10.29 %    9.09 %    10.37 %    8.27 %
Net interest margin   3.59 %    3.67 %    3.67 %    3.70 %    3.67 %
Efficiency ratio (1)   58.75 %    59.77 %    63.68 %    60.42 %    66.06 %
________________                                  
(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.

Balance Sheet

                   
     September 30,      December 31,    Percent      September 30,    Percent  
     2015      2014    Change      2014    Change  
   (Dollars in thousands, except per share amounts)
Total investments  $ 433,299    $ 449,482    (3.6 )%  $ 456,118    (5.0 )%
Total loans, net of deferred costs and fees    1,726,151      1,541,434    12.0 %    1,482,268    16.5 %
Allowance for loan losses    (22,890 )    (22,490 )  1.8 %    (22,350 )  2.4 %
Total assets    2,285,630      2,124,778    7.6 %    2,077,939    10.0 %
Total deposits    1,847,329      1,685,324    9.6 %    1,662,598    11.1 %
Book value per common share    10.07      9.57    5.2 %    9.46    6.4 %
Tangible book value per common share    9.81      9.24    6.2 %    9.10    7.8 %
Equity ratio -- GAAP    9.57 %    9.74 %  (1.7 )%    9.88 %  (3.1 )%
Tangible common equity ratio    9.35 %    9.43 %  (0.8 )%    9.54 %  (2.0 )%
Total risk-based capital ratio    13.39 %    13.85 %  (3.3 )%    14.25 %  (6.0 )%
Assets under management and administration  $ 686,662    $ 683,138    0.5 %  $ 675,431    1.7 %
                   

Net Interest Income and Margin

         
     Three Months Ended      Nine Months Ended  
     September 30,     June 30,      September 30,      September 30,      September 30,  
     2015     2015      2014      2015      2014  
   (Dollars in thousands)
Net interest income  $ 19,406   $ 18,940    $ 17,809    $ 57,123    $ 51,133  
Average earning assets    2,141,807     2,069,468      1,927,474      2,064,587      1,862,369  
Interest rate spread    3.45 %   3.54 %    3.47 %    3.56 %    3.47 %
Net interest margin    3.59 %   3.67 %    3.67 %    3.70 %    3.67 %
Net interest margin, fully tax equivalent    3.67 %   3.75 %    3.75 %    3.78 %    3.76 %
Average cost of interest-bearing liabilities                                  
 (including noninterest-bearing deposits)    0.28 %   0.25 %    0.37 %    0.26 %    0.38 %
Average cost of deposits                                  
 (including noninterest-bearing deposits)    0.19 %   0.18 %    0.16 %    0.18 %    0.15 %
                     

During the third quarter 2015, net interest income increased $1.6 million, as compared to the same quarter in the prior year, due to a $1.3 million increase in interest income and a $0.3 million decrease in interest expense. Interest income increased mostly due to a 16.4% increase in average loan balances. Interest expense decreased primarily due to the prepayment of $90 million in FHLB term advances in the fourth quarter 2014.

Net interest income increased $0.5 million, as compared to the second quarter 2015, due to a $0.7 million increase in interest income, partially offset by a $0.2 million increase in interest expense. The increase in interest income during the third quarter 2015, as compared to the second quarter 2015, was due to an $84.8 million increase in average loan balances, partially offset by lower loan yields. The increase in interest expense during the third quarter 2015, as compared to the second quarter 2015, was due to an $84.8 million increase in average interest-bearing deposits required to fund loan growth. During the third quarter 2015, the net interest margin decreased eight basis points, as compared to the second quarter 2015, mostly due to a decline in loan yield.

For the nine months ended September 30, 2015, net interest income increased $6.0 million, as compared to the same period in 2014, due to a $4.7 million increase in interest income and a $1.3 million decrease in interest expense. The year-to-date increase in interest income was driven by a $219.2 million increase in average loans, compared to the same period in 2014. The decline in interest expense during the first nine months of 2015, as compared to the same period in 2014, was primarily due to the prepayment of $90.0 million of FHLB term advances in the fourth quarter 2014. During the nine months ended September 30, 2015, the net interest margin increased three basis points to 3.70% as compared to 3.67% for the same period in 2014. The increase in the net interest margin was mostly due to the decrease in the cost of average interest-bearing liabilities due to the prepayment of FHLB term advances, as discussed above.

Noninterest Income

The following table presents noninterest income as of the dates indicated:

        
     Three Months Ended     Nine Months Ended
     September 30,
2015
   June 30,
2015
   September 30,
2014
    September 30,
2015
   September 30,
2014
   (In thousands) 
Noninterest income:                          
 Deposit service and other fees  $ 2,309  $ 2,338  $ 2,290   $ 6,682  $ 6,708
 Investment management and trust    1,292    1,338    1,279     3,964    3,149
 Increase in cash surrender value of life insurance    447    461    291     1,316    877
 Gain on sale of securities    -    -    3     -    28
 Gain on sale of SBA loans    232    169    186     681    351
 Other    119    98    289     275    720
 Total noninterest income  $ 4,399  $ 4,404  $ 4,338   $ 12,918  $ 11,833
                 

Third quarter 2015 noninterest income was consistent with second quarter 2015 noninterest income of $4.4 million and increased $0.1 million as compared to $4.3 million in the third quarter 2014.

For the nine months ended September 30, 2015, noninterest income increased $1.1 million to $12.9 million as compared to $11.8 million for the same period in 2014. The increase in noninterest income was due to a $0.8 million increase in investment management and trust income, a $0.4 million increase in BOLI income and a $0.3 million increase in gains on sale of SBA loans. The increase in BOLI income was due to the purchase of an additional BOLI subsequent to September 30, 2014. The increases in noninterest income were partially offset by decreases in other noninterest income related to customer interest rate swap income for the nine months ended September 30, 2015 as compared to the same period in the prior year.

Noninterest Expense

The following table presents noninterest expense as of the dates indicated:

       
     Three Months Ended    Nine Months Ended
     September 30,
2015
   June 30,
2015
   September 30,
2014
   September 30,
2015
   September 30,
2014
     (In thousands)
Noninterest expense:                         
 Salaries and employee benefits  $ 8,318  $ 7,999  $ 8,135  $ 24,921  $ 24,332
 Occupancy expense    1,487    1,630    1,583    4,814    4,764
 Furniture and equipment    740    736    693    2,206    2,061
 Amortization of intangible assets    495    496    670    1,486    1,852
 Other real estate owned, net    (31)    54    147    64    225
 Insurance and assessment    604    626    594    1,795    1,779
 Professional fees    838    853    890    2,520    2,593
 Impairment of long-lived assets    -    122    -    122    110
 Other general and administrative    2,415    2,440    2,447    7,164    6,996
 Total noninterest expense  $ 14,866  $ 14,956  $ 15,159  $ 45,092  $ 44,712
                 

Noninterest expense decreased $0.1 million to $14.9 million, as compared to $15.0 million in the second quarter 2015, and decreased $0.3 million as compared to the same quarter in 2014. The Company's tax equivalent efficiency ratio improved 102 basis points to 58.75% for the quarter ended September 30, 2015, as compared to 59.77% for the quarter ended June 30, 2015, and improved 493 basis points as compared to 63.68% for the quarter ended September 30, 2014.

For the nine months ended September 30, 2015, noninterest expense was $45.1 million as compared to $44.7 million for the same period in 2014. The increase in noninterest expense for the first nine months of 2015, as compared to the same period in 2014, was primarily due to a $0.6 million increase in salaries and employee benefits mostly due to the creation of new positions within our wealth management, healthcare lending, equipment finance lending and compliance groups.

Balance Sheet

                   
     September 30,      December 31,    Percent      September 30,    Percent  
     2015      2014    Change      2014    Change  
     (Dollars in thousands)  
Total assets  $ 2,285,630    $ 2,124,778    7.6 %  $ 2,077,939    10.0 %
Average assets, quarter-to-date    2,268,603      2,067,371    9.7 %    2,043,756    11.0 %
Total loans, net of deferred costs and fees    1,726,151      1,541,434    12.0 %    1,482,268    16.5 %
Total deposits    1,847,329      1,685,324    9.6 %    1,662,598    11.1 %
                                
Equity ratio -- GAAP    9.57 %    9.74 %  (1.7 )%    9.88 %  (3.1 )%
Tangible common equity ratio    9.35 %    9.43 %  (0.8 )%    9.54 %  (2.0 )%
                   

At September 30, 2015, the Company had total assets of $2.3 billion, reflecting a $160.9 million increase as compared to December 31, 2014 and a $207.7 million increase as compared to September 30, 2014. The increase in total assets during the nine months ended September 30, 2015 was mostly due to a $184.7 million increase in net loans. The growth in net loans for the first nine months of 2015 was funded by $162.0 million in deposit growth and a $16.2 million decline in investments. The increase in total assets, as compared to September 30, 2014, was due to a $243.9 million increase in net loans and a $16.4 million increase in BOLI, funded by a $184.7 million increase in deposits, a $22.9 million decrease in cash and a $22.8 million decrease in investments.

The following table sets forth the amount of loans outstanding at the dates indicated:

             
     September 30,    June 30,    December 31,    September 30,
     2015    2015    2014    2014
     (In thousands)
Loans held for sale  $ 8  $ 423   $ -   $ -  
Commercial and residential real estate    1,196,209    1,146,508     1,049,315     1,001,174  
Construction    92,473    85,516     66,634     89,787  
Commercial    336,414    333,860     324,057     286,545  
Agricultural    10,991    12,380     10,625     11,986  
Consumer    63,517    61,870     60,155     60,492  
SBA    25,911    26,975     30,025     32,107  
Other    510    1,299     1,002     773  
 Total gross loans    1,726,033    1,668,831     1,541,813     1,482,864  
  Deferred costs and fees    118    (173 )   (379 )   (596 )
 Loans, net of deferred costs and fees  $ 1,726,151  $ 1,668,658   $ 1,541,434   $ 1,482,268  
                

The following table presents the changes in our loan balances at the dates indicated:

                
     September 30,    June 30,    March 31,    December 31,    September 30,
     2015    2015    2015    2014    2014
     (In thousands)
Beginning balance  $ 1,668,658   $ 1,555,154   $ 1,541,434   $ 1,482,268   $ 1,438,089  
New credit extended    149,502     169,687     95,738     106,718     93,215  
Net existing credit advanced    60,784     83,792     57,900     71,815     78,829  
Net pay-downs and maturities    (152,279 )   (138,770 )   (141,983 )   (119,854 )   (127,633 )
Charge-offs and other    (514 )   (1,205 )   2,065     487     (232 )
 Loans, net of deferred costs and fees  $ 1,726,151   $ 1,668,658   $ 1,555,154   $ 1,541,434   $ 1,482,268  
                                
Net change -- loans outstanding  $ 57,493   $ 113,504   $ 13,720   $ 59,166   $ 44,179  
                     

During the third quarter 2015, loans net of deferred costs and fees increased $57.5 million which was comprised of a $49.7 million increase in commercial and residential real estate loans, a $7.0 million increase in construction loans and a $2.6 million increase in commercial loans. Third quarter 2015 net loan growth consisted of $210.3 million in new loans and net existing credit advanced, partially offset by $152.3 million in net loan pay-downs and maturities. In addition to contractual loan principal payments and maturities, the third quarter 2015 included $23.5 million in pay-downs related to revolving line of credit fluctuations, $21.2 million in early payoffs related to the sale of the borrower's assets, $19.0 million in pay-offs due to our strategic decision to not match certain financing terms offered by competitors, and $9.3 million in pay-downs of energy-related loans.

During the third quarter 2015, we continued to proactively reduce our direct exposure to the energy industry, realizing reductions of 26.5% or $16.6 million in commitments and 29.2% or $9.3 million in outstanding loan balances. As compared to December 31, 2014, our direct exposure to the energy industry has declined by 46.0% or $39.2 million in commitments and by 44.1% or $24.2 million in outstanding loan balances. Our current energy portfolio consists of eight relationships totaling $22.5 million in outstanding loan balances, which is less than 2.0% of our total loan portfolio. At September 30, 2015, the energy portfolio was comprised primarily of exploration and production loans, with relatively equal exposure to oil and natural gas.

For the twelve months ended September 30, 2015, loans net of deferred costs and fees increased by $243.9 million, or 16.5%. Net loan growth was comprised of a $195.0 million increase in commercial and residential real estate loans and a $49.9 million increase in commercial loans. The growth in loans was the result of development of new customer relationships and growth in existing customer relationships. The utilization rate on commercial lines of credit was 39.7% at September 30, 2015 as compared to 41.0% at both December 31, 2014 and September 30, 2014.

At September 30, 2015, 1-4 family residential real estate loans grew $44.8 million to $302.9 million, as compared to $258.1 million at September 30, 2014, mostly due to growth in jumbo mortgage loans.

The following table sets forth the amounts of deposits outstanding at the dates indicated:

                
     September 30,    June 30,    March 31,    December 31,    September 30,
     2015    2015    2014    2014    2014
     (In thousands)
Noninterest-bearing demand  $ 683,797  $ 622,364  $ 659,765  $ 654,051  $ 617,704
Interest-bearing demand and NOW    405,092    379,495    356,573    326,748    365,538
Money market    369,023    362,798    370,705    374,063    357,368
Savings    144,602    139,305    141,948    138,588    128,931
Time    244,815    238,037    192,890    191,874    193,057
Total deposits  $ 1,847,329  $ 1,741,999  $ 1,721,881  $ 1,685,324  $ 1,662,598
                

At September 30, 2015, non-maturing deposits were $1.6 billion, an increase of $109.1 million as compared to the fourth quarter 2014, and an increase of $133.0 million, or 9.0%, as compared to the third quarter 2014. At September 30, 2015, noninterest-bearing deposits as a percentage of total deposits were 37.0%, as compared to 38.8% at December 31, 2014 and 37.2% at September 30, 2014.

At September 30, 2015, securities sold under agreements to repurchase were $30.2 million, a decrease of $3.4 million as compared to December 31, 2014, and an increase of $6.5 million as compared to September 30, 2014.

Total FHLB borrowings were $151.3 million at September 30, 2015 consisting of $56.3 million of overnight advances on our 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 our subsidiary bank, Guaranty Bank and Trust Company ("Bank") as of the dates presented, along with the applicable regulatory capital requirements:

             
   Ratio at
September 30,
2015
   Ratio at
December 31,
2014
   Minimum
Capital
Requirement at
September 30, 2015
   Minimum
Requirement for
"Well-Capitalized"
Institution at
September 30, 2015
 
Common Equity Tier 1 Risk-Based Capital Ratio                   
 Consolidated  11.05 %  N/A    4.50 %  N/A  
 Guaranty Bank and Trust Company  11.94 %  N/A    4.50 %  6.50 %
                     
Tier 1 Risk-Based Capital Ratio                    
 Consolidated  12.23 %  12.60 %  6.00 %  N/A  
 Guaranty Bank and Trust Company  11.94 %  12.33 %  6.00 %  8.00 %
                     
Total Risk-Based Capital Ratio                    
 Consolidated  13.39 %  13.85 %  8.00 %  N/A  
 Guaranty Bank and Trust Company  13.10 %  13.58 %  8.00 %  10.00 %
                     
Leverage Ratio                    
 Consolidated  10.75 %  11.10 %  4.00 %  N/A  
 Guaranty Bank and Trust Company  10.50 %  10.86 %  4.00 %  5.00 %
              

At September 30, 2015, all 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 period, driven by loan growth during the first nine months of 2015 as well as 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 as of the dates indicated:

                                    
     September 30,      June 30,      March 31,      December 31,      September 30,  
     2015      2015      2015      2014      2014  
     (Dollars in thousands)  
Nonaccrual loans and leases  $ 14,512    $ 13,192    $ 13,266    $ 12,617    $ 13,237  
Accruing loans past due 90 days or more (1)    -      -      -      -      -  
                                    
Total nonperforming loans (NPLs)  $ 14,512    $ 13,192    $ 13,266    $ 12,617    $ 13,237  
Other real estate owned and foreclosed assets    1,371      1,503      2,175      2,175      3,526  
                                    
Total nonperforming assets (NPAs)  $ 15,883    $ 14,695    $ 15,441    $ 14,792    $ 16,763  
                                    
Total classified assets  $ 31,208    $ 31,762    $ 28,637    $ 27,271    $ 32,578  
                                    
Accruing loans past due 30-89 days (1)  $ 3,461    $ 1,487    $ 8,368    $ 1,381    $ 458  
                                    
Charged-off loans  $ (75 )  $ (48 )  $ (49 )  $ (73 )  $ (80 )
Recoveries    101      285      82      214      278  
 Net recoveries  $ 26    $ 237    $ 33    $ 141    $ 198  
                                    
Provision (credit) for loan losses  $ 14    $ 113    $ (23 )  $ (1 )  $ (3 )
                                    
Allowance for loan losses  $ 22,890    $ 22,850    $ 22,500    $ 22,490    $ 22,350  
                                    
Selected ratios:                                   
NPLs to loans, net of deferred costs and fees (2)    0.84 %    0.79 %    0.85 %    0.82 %    0.89 %
NPAs to total assets    0.69 %    0.65 %    0.72 %    0.70 %    0.81 %
Allowance for loan losses to NPLs    157.73 %    173.21 %    169.61 %    178.25 %    168.84 %
Allowance for loan losses to loans, net of deferred costs and fees (2)    1.33 %    1.37 %    1.45 %    1.46 %    1.51 %
Loans 30-89 days past due to loans, net of deferred costs and fees (2)    0.20 %    0.09 %    0.54 %    0.09 %    0.03 %
Texas ratio (3)    6.09 %    5.80 %    6.07 %    6.01 %    6.89 %
Classified asset ratio (4)    13.51 %    13.87 %    11.26 %    11.08 %    13.39 %
                     
(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:

                          
September 30, 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  $ 1,094  $ -  $ 12,005  $ 13,099  $ 1,196,291
Construction    -    -    986    986    92,479
Commercial    1,987    -    914    2,901    336,437
Consumer    149    -    471    620    63,521
Other    231    -    136    367    37,415
Total  $ 3,461  $ -  $ 14,512  $ 17,973  $ 1,726,143
                
                          
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 third quarter 2015, nonperforming assets increased by $1.2 million from June 30, 2015 and decreased $0.9 million from September 30, 2014. The increase in nonperforming assets during the third quarter 2015 as compared to the second quarter 2015 was primarily the result of the downgrade of two loans to nonaccrual. Nonperforming loans at September 30, 2015 include one out-of-state loan participation with a balance of $9.5 million.

At September 30, 2015, classified assets represent 13.5% of bank-level Tier 1 risk-based capital plus allowance for loan losses as compared to 13.9% at June 30, 2015 and 13.4% at September 30, 2014.

Net recoveries in the third quarter 2015 were less than $0.1 million as compared to net recoveries of $0.2 million in the second quarter 2015 and net recoveries of $0.2 million in the third quarter 2014. During the quarter ended September 30, 2015, the Bank recorded an immaterial provision for loan losses as compared to a $0.1 million provision recorded in the second quarter 2015 and the immaterial credit provision for loan losses recorded in the third 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 September 30, 2015, the Company had 21,728,202 shares of common stock outstanding, consisting of 20,709,202 shares of voting common stock, of which 651,275 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, acquisition, reorganization and integration costs 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:

                           
                           
   Three Months Ended     Nine Months Ended
     September 30,    June 30,    September 30,     September 30,    September 30,
     2015    2015    2014     2015    2014
     (Dollars in thousands, except per share amounts)
Income before income taxes  $ 8,925   $ 8,275  $ 6,991    $ 24,845  $ 18,239  
Adjusted for:                              
 Provision (credit) for loan losses    14     113    (3 )    104    15  
 Expenses (gains) related to other real estate owned, net    (31 )   54    147      64    225  
 Impairment of long-lived assets    -     122    -      122    110  
 Gain on sale of securities    -     -    (3 )    -    (28 )
Pre-tax operating earnings  $ 8,908   $ 8,564  $ 7,132    $ 25,135  $ 18,561  
                               
Weighted basic average common shares outstanding:    21,076,380     21,070,199    20,966,179      21,061,445    20,954,046  
Fully diluted average common shares outstanding:    21,224,989     21,200,438    21,089,221      21,215,435    21,070,895  
                               
Pre-tax operating earnings per common share -- basic:  $ 0.42   $ 0.41  $ 0.34    $ 1.19  $ 0.89  
Pre-tax operating earnings per common share -- diluted:  $ 0.42   $ 0.40  $ 0.34    $ 1.18  $ 0.88  

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            
    September 30,   December 31,   September 30,
    2015   2014   2014
    (Dollars in thousands, except per share amounts)
Total stockholders' equity $ 218,803   $ 206,939   $ 205,361  
Less: Intangible assets   (5,668 )   (7,154 )   (7,808 )
Tangible common equity $ 213,135   $ 199,785   $ 197,553  
                   
Number of common shares outstanding   21,728,202     21,628,873     21,714,115  
                   
Book value per common share $ 10.07   $ 9.57   $ 9.46  
Tangible book value per common share $ 9.81   $ 9.24   $ 9.10  
          
                   
Tangible Common Equity Ratio                  
    September 30,     December 31,     September 30,  
    2015     2014     2014  
    (Dollars in thousands) 
Total stockholders' equity $ 218,803   $ 206,939   $ 205,361  
Less: Intangible assets   (5,668 )   (7,154 )   (7,808 )
Tangible common equity $ 213,135   $ 199,785   $ 197,553  
                   
Total assets $ 2,285,630   $ 2,124,778   $ 2,077,939  
Less: Intangible assets   (5,668 )   (7,154 )   (7,808 )
Tangible assets $ 2,279,962   $ 2,117,624   $ 2,070,131  
                   
Equity ratio -- GAAP (total stockholders' equity / total assets)   9.57   9.74   9.88
Tangible common equity ratio (tangible common equity / tangible assets)   9.35   9.43   9.54
          

About Guaranty Bancorp

Guaranty Bancorp is a $2.3 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

                 
     September 30,     December 31,    September 30,
     2015     2014    2014
     (In thousands)
Assets                
Cash and due from banks  $ 23,750   $  32,441   $ 46,617  
                     
Securities available for sale, at fair value    276,353      346,146     349,993  
Securities held to maturity    140,928      88,514     91,042  
Bank stocks, at cost    16,018      14,822     15,083  
   Total investments    433,299      449,482     456,118  
                     
Loans held for sale    8      -     -  
                     
Loans, held for investment, net of deferred costs and fees    1,726,143      1,541,434     1,482,268  
 Less allowance for loan losses    (22,890 )    (22,490 )   (22,350 )
   Net loans, held for investment    1,703,253      1,518,944     1,459,918  
                     
Premises and equipment, net    48,564      45,937     46,492  
Other real estate owned and foreclosed assets    1,371      2,175     3,526  
Other intangible assets, net    5,668      7,154     7,808  
Bank owned life insurance    48,537      42,456     32,135  
Other assets    21,180      26,189     25,325  
   Total assets  $ 2,285,630   $  2,124,778   $ 2,077,939  
                     
Liabilities and Stockholders' Equity                    
Liabilities:                    
 Deposits:                    
  Noninterest-bearing demand  $ 683,797   $  654,051   $ 617,704  
  Interest-bearing demand and NOW    405,092      326,748     365,538  
  Money market    369,023      374,063     357,368  
  Savings    144,602      138,588     128,931  
  Time    244,815      191,874     193,057  
   Total deposits    1,847,329      1,685,324     1,662,598  
Securities sold under agreement to repurchase and federal funds purchased    30,151      33,508     23,674  
Federal Home Loan Bank term notes    95,000      20,000     110,000  
Federal Home Loan Bank line of credit borrowing    56,300      140,300     40,400  
Subordinated debentures    25,774      25,774     25,774  
Interest payable and other liabilities    12,273      12,933     10,132  
   Total liabilities    2,066,827      1,917,839     1,872,578  
                     
Stockholders' equity:                    
 Common stock and additional paid-in capital -- common stock    711,610      709,365     708,597  
 Accumulated deficit    (385,930 )    (396,172 )   (396,339 )
 Accumulated other comprehensive loss    (3,421 )    (3,127 )   (4,052 )
 Treasury stock    (103,456 )    (103,127 )   (102,845 )
   Total stockholders' equity    218,803      206,939     205,361  
   Total liabilities and stockholders' equity  $ 2,285,630   $  2,124,778   $ 2,077,939  
              

GUARANTY BANCORP AND SUBSIDIARIES

Unaudited Consolidated Statements of Operations

                      
     Three Months Ended September 30,     Nine Months Ended September 30,
     2015    2014     2015    2014
                      
     (In thousands, except share and per share data)
Interest income:                     
 Loans, including costs and fees  $ 17,829  $ 16,336   $ 51,749  $ 46,508
 Investment securities:                     
  Taxable    2,064    2,287     6,265    6,995
  Tax-exempt    719    691     2,133    2,007
 Dividends    249    214     724    622
 Federal funds sold and other    2    1     5    4
  Total interest income    20,863    19,529     60,876    56,136
Interest expense:                     
 Deposits    866    647     2,284    1,797
 Securities sold under agreement to repurchase and federal funds purchased    11    9     31    27
 Borrowings    375    862     832    2,580
 Subordinated debentures    205    202     606    599
  Total interest expense    1,457    1,720     3,753    5,003
  Net interest income    19,406    17,809     57,123    51,133
Provision (credit) for loan losses    14    (3)     104    15
  Net interest income, after provision for loan losses    19,392    17,812     57,019    51,118
Noninterest income:                     
 Deposit service and other fees    2,309    2,290     6,682    6,708
 Investment management and trust    1,292    1,279     3,964    3,149
 Increase in cash surrender value of life insurance    447    291     1,316    877
 Gain on sale of securities    -    3     -    28
 Gain on sale of SBA loans    232    186     681    351
 Other    119    289     275    720
  Total noninterest income    4,399    4,338     12,918    11,833
Noninterest expense:                     
 Salaries and employee benefits    8,318    8,135     24,921    24,332
 Occupancy expense    1,487    1,583     4,814    4,764
 Furniture and equipment    740    693     2,206    2,061
 Amortization of intangible assets    495    670     1,486    1,852
 Other real estate owned, net    (31)    147     64    225
 Insurance and assessments    604    594     1,795    1,779
 Professional fees    838    890     2,520    2,593
 Impairment of long-lived assets    -    -     122    110
 Other general and administrative    2,415    2,447     7,164    6,996
  Total noninterest expense    14,866    15,159     45,092    44,712
  Income before income taxes    8,925    6,991     24,845    18,239
Income tax expense    2,923    2,320     8,282    5,942
  Net income  $ 6,002  $ 4,671   $ 16,563  $ 12,297
                      
Earnings per common share -- basic:  $ 0.28  $ 0.22   $ 0.79  $ 0.59
Earnings per common share -- diluted:    0.28    0.22     0.78    0.58
                      
Dividend declared per common share:  $ 0.10  $ 0.05   $ 0.30  $ 0.15
                      
Weighted average common shares outstanding -- basic:    21,076,380    20,966,179     21,061,445    20,954,046
Weighted average common shares outstanding -- diluted:    21,224,989    21,089,221     21,215,435    21,070,895
             

GUARANTY BANCORP AND SUBSIDIARIES

Unaudited Consolidated Average Balance Sheets

                            
     QTD Average      YTD Average
     September 30,    June 30,    September 30,      September 30,    September 30,
     2015    2015    2014      2015    2014
     (In thousands)
Assets                           
Interest earning assets                           
 Loans, net of deferred costs and fees  $ 1,703,218  $ 1,618,430  $ 1,463,042    $ 1,617,724  $ 1,398,501
 Securities    436,643    449,060    462,603      444,778    461,895
 Other earning assets    1,946    1,978    1,829      2,085    1,973
Average earning assets    2,141,807    2,069,468    1,927,474      2,064,587    1,862,369
Other assets    126,796    130,255    116,282      128,361    117,013
Total average assets  $ 2,268,603  $ 2,199,723  $ 2,043,756    $ 2,192,948  $ 1,979,382
                            
Liabilities and Stockholders' Equity                           
Average liabilities:                           
Average deposits:                           
 Noninterest-bearing deposits  $ 637,184  $ 634,824  $ 595,041    $ 639,694  $ 568,188
 Interest-bearing deposits    1,159,829    1,075,022    1,033,094      1,093,813    984,640
 Average deposits    1,797,013    1,709,846    1,628,135      1,733,507    1,552,828
Other interest-bearing liabilities    242,330    263,702    201,579      233,066    218,736
Other liabilities    12,518    12,630    10,131      12,885    9,075
Total average liabilities    2,051,861    1,986,178    1,839,845      1,979,458    1,780,639
Average stockholders' equity    216,742    213,545    203,911      213,490    198,743
Total average liabilities and stockholders' equity  $ 2,268,603  $ 2,199,723  $ 2,043,756    $ 2,192,948  $ 1,979,382
                 

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) (October 14, 2015 - 4:10 PM EDT)

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