Guaranty Bancorp Announces 2015 Third Quarter Financial Results
/EINPresswire.com/ -- 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 September September September
30, June 30, 30, 30, 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 December September
30, 31, Percent 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 September September September
30, June 30, 30, 30, 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 September September September
30, June 30, 30, 30, 30,
2015 2015 2014 2015 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 September September September
30, June 30, 30, 30, 30,
2015 2015 2014 2015 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 December September
30, 31, Percent 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 December September
30, June 30, 31, 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 December September
30, June 30, March 31, 31, 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 December September
30, June 30, March 31, 31, 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:
Minimum
Requirement
for
Minimum "Well-
Capital Capitalized"
Ratio at Ratio at Requirement Institution
September December at at
30, 31, September September
2015 2014 30, 2015 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 December September
30, June 30, March 31, 31, 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:
90 Days + Total Total
30-89 Past Due Nonaccrual Loans,
September 30, Days Past and Still and Held for
2015 Due Accruing Nonaccrual Past Due 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
===========================================================
90 Days + Total Total
30-89 Past Due Nonaccrual Loans,
December 31, Days Past and Still and Held for
2014 Due Accruing Nonaccrual Past Due 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 September September September
30, June 30, 30, 30, 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 Nine Months Ended
September 30, 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 September September September
30, June 30, 30, 30, 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
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