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Guaranty Bancorp Announces 2013 Second Quarter Financial Results

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DENVER, CO -- (Marketwired) -- 07/17/13 -- Guaranty Bancorp (NASDAQ: GBNK)

•Net income growth of $1.5 million from prior linked quarter, or 68.0% •Year-to-date loan growth of $81.8 million, or 14.2% annualized •Significantly improved tax-equivalent efficiency ratio to 65.6% from 73.4% in the prior linked quarter •Favorable decline in nonperforming assets of 35.3% during the second quarter •Paid first dividend of 2.5 cents per share in May 2013

Guaranty Bancorp (NASDAQ: GBNK), a community bank holding company based in Colorado, today announced second quarter 2013 net income of $3.8 million, or $0.18 earnings per basic and diluted common share. Net income for the same quarter in 2012 was $6.2 million, or $0.30 earnings per basic and diluted common share (1). The second quarter 2012 net income was impacted by two significant items -- a $5.7 million reversal of expense related to the remaining deferred tax valuation allowance, partially offset by a $2.8 million impairment on bank facilities. The Company's pre-tax operating earnings (2) of $5.3 million in the second quarter 2013 improved by $1.7 million compared to the same quarter in 2012.

The $1.7 million increase in pre-tax operating earnings in the second quarter 2013 as compared to the same quarter in the prior year was due mostly to a $0.4 million increase in net interest income due primarily to lower interest costs; $0.4 million of increased asset management fees resulting from the purchase of Private Capital Management ("PCM") in July 2012; $0.3 million in increased gain on sale of SBA loans and a net reduction in noninterest expense.

"The experienced team we have assembled is successfully executing on our business strategies by attracting new customers and expanding current relationships across our markets," said Paul W. Taylor, President and CEO. "In addition, our continued focus on driving noninterest income and managing our expenses resulted in a $1.5 million increase to our net income for the quarter. As the Colorado economy continues to improve, we are seeing greater business and consumer confidence as evidenced by elevated utilization of our outstanding lines of credit."

Mr. Taylor continued, "We grew loans by 14.2% for the first six months of 2013, annualized, while maintaining our overall net interest margin during the same period. Commercial loan growth continues to be strong with a 27.9% annualized increase for the first six months of 2013. Our nonperforming assets declined 35.3% to $26.0 million resulting in a decline in nonperforming assets as a percentage of total assets to 1.4% from 2.2% at the end of the prior quarter. Our tax-equivalent efficiency ratio improved to 65.6% from 73.4% during the second quarter due to the combination of our reduced credit costs; strong loan growth and significant increases in noninterest income."

For the six months ending June 30, 2013, pre-tax operating earnings increased $2.1 million to $9.4 million as compared to $7.3 million for the six months ending June 30, 2012. The increase in pre-tax operating earnings was mostly due to a $1.6 million improvement in noninterest income, due to a $1.0 million increase in investment advisory fees and increases in other service fee income, as well as a $0.4 million increase in net interest income. For the six months ending June 30, 2013, net income was $6.1 million, or $0.29 earnings per basic and diluted share compared to net income of $9.1 million, or $0.44 earnings per basic and diluted share for the same period in 2012. The net income for the first six months of 2012 included a $5.7 million reversal of the remaining deferred tax valuation allowance, partially offset by a $2.8 million impairment on bank facilities during the second quarter 2012.

(1) Share and per share numbers used throughout this release, including earnings per share, tangible book value per share and book value per share reflect the Company's 1-for-5 reverse stock split, which was effective May 20, 2013.
(2) "Pre-tax operating earnings" is considered a "non-GAAP" financial measure, which we define as income before income taxes adjusted for (if any) provision (credit) for loan losses, other real estate owned expenses, debt termination expenses, acquisition, reorganization and integrations costs and securities gains and losses. More information regarding this measure and a reconciliation to the comparable GAAP measurement is provided under the heading Non-GAAP Financial Measures in this release.

Key Financial Measures
Income Statement


Three Months Ended Six Months Ended ----------------------------- ------------------ June 30, March 31, June 30, June 30, June 30, 2013 2013 2012 2013 2012 -------- --------- -------- -------- -------- (Dollars in thousands, except per share amounts)Net income $ 3,818 $ 2,272 $ 6,192 $ 6,090 $ 9,109Earnings per common share $ 0.18 $ 0.11 $ 0.30 $ 0.29 $ 0.44Return on average assets 0.83% 0.51% 1.46% 0.67% 1.09%Net interest margin 3.61% 3.61% 3.86% 3.61% 3.90%Efficiency ratio (tax equivalent) 65.62% 73.39% 74.70% 69.38% 73.74%




Balance Sheet


December June 30, 31, Percent June 30, Percent 2013 2012 Change 2012 Change ---------- ---------- ------- ---------- ------- (Dollars in thousands, except per share amounts)Cash and cash equivalents $ 30,613 $ 163,217 (81.2)% $ 137,133 (77.7)%Total investments 484,971 458,927 5.7% 398,151 21.8%Total loans, net of unearned loan fees 1,240,555 1,158,749 7.1% 1,110,161 11.7%Allowance for loan losses (20,218) (25,142) (19.6)% (29,307) (31.0)%Total assets 1,866,128 1,886,938 (1.1)% 1,750,539 6.6%Average earning assets, quarter-to- date 1,746,949 1,740,273 0.4% 1,602,777 9.0%Average assets, quarter-to-date 1,848,644 1,843,212 0.3% 1,706,862 8.3%Total deposits 1,449,251 1,454,756 (0.4)% 1,378,937 5.1%Book value per common share 8.66 8.89 (2.6)% 8.48 2.1%Tangible book value per common share 8.29 8.45 (1.9)% 8.08 2.6%Equity ratio - GAAP 9.93% 9.97% (0.4)% 10.29% (3.5)%Tangible common equity ratio 9.55% 9.53% 0.2% 9.85% (3.0)%Total risk-based capital ratio 14.96% 16.27% (8.1)% 16.50% (9.3)%




Net Interest Income and Margin


Three Months Ended Six Months Ended ----------------------------- ------------------ June 30, March 31, June 30, June 30, June 30, 2013 2013 2012 2013 2012 -------- --------- -------- -------- -------- (Dollars in thousands)Net interest income $ 15,739 $ 15,378 $ 15,383 $ 31,117 $ 30,683Interest rate spread 3.41% 3.35% 3.53% 3.38% 3.57%Net interest margin 3.61% 3.61% 3.86% 3.61% 3.90%Net interest margin, fully tax equivalent 3.72% 3.72% 3.95% 3.72% 3.99%Average cost of deposits (including noninterest bearing deposits) 0.17% 0.18% 0.21% 0.18% 0.22%




Net interest income increased by $0.4 million to $15.7 million in the second quarter 2013 compared to the first quarter 2013, and increased by $0.4 million compared to the second quarter 2012. Second quarter 2013 net interest margin remained consistent with the first quarter 2013 at 3.61% and decreased 25 basis points from 3.86% in the second quarter 2012.

Second quarter 2013 net interest margin was unchanged as compared to the prior linked quarter. The decline in net interest margin in the second quarter 2013 as compared to the same quarter in 2012 was the result of a 43 basis point decline in the yield on earnings assets, partially offset by a 31 basis point decline in the cost of interest bearing liabilities.

The increase in net interest income of $0.4 million in the second quarter 2013 as compared to the prior linked quarter was the result of an increase in interest income of $0.2 million and a decline in interest expense of $0.2 million. The increase in interest income as compared to prior quarter was mostly due to an increase in average loans of $50.7 million. The decline in interest expense as compared to prior quarter was primarily due to the prepayment of $15.0 million in fixed, high-cost trust preferred securities ("TruPS") and related subordinated debentures in the first quarter 2013.

The increase in net interest income of $0.4 million in the second quarter 2013 as compared to the same quarter in 2012 was the result of a decline in interest expense of $0.6 million, partially offset by a $0.2 million decrease in interest income. The decrease in interest expense as compared to the second quarter 2012 was primarily the result of the prepayment of $15.0 million in fixed, high-cost TruPS and related subordinated debentures in the first quarter 2013 as well as a two basis point decrease in the average cost of deposits.

Net interest income increased $0.4 million for the first six months of 2013 to $31.1 million from $30.7 million for the same period in 2012 due mostly to lower interest costs. Net interest margin declined 29 basis points to 3.61% for the first six months in 2013 from 3.90% for the first six months in 2012. Interest expense decreased $1.1 million, or 22.3%, in the first six months of 2013 as compared to the same period in 2012 mostly due to the prepayment of $15.0 million in fixed, high-cost TruPS and related subordinated debentures in the first quarter 2013 combined with a decline in the average interest bearing liabilities of seven basis points to 0.28% in the first six months of 2013 from 0.35% for the same period in 2012. The decline in interest expense for the first six months of 2013 as compared to the same period in 2012 was partially offset by lower interest income caused by lower yields on earning assets.

Noninterest Income

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


Three Months Ended Six Months Ended --------------------------- ----------------- June 30, March 31, June 30, June 30, June 30, 2013 2013 2012 2013 2012 -------- --------- -------- -------- -------- (In thousands)Noninterest income: Customer service and other fees $ 3,018 $ 2,620 $ 2,382 $ 5,638 $ 4,653 Gain on sale of securities 54 - 342 54 964 Gain on sale of SBA loans 287 136 - 423 - Other 352 194 187 546 393 -------- --------- -------- -------- -------- Total noninterest income $ 3,711 $ 2,950 $ 2,911 $ 6,661 $ 6,010 ======== ========= ======== ======== ========




Noninterest income improved $0.8 million, or 25.8% to $3.7 million in the second quarter 2013 as compared to both the prior linked quarter and the same quarter in 2012. The increase in noninterest income as compared to the prior linked quarter was mostly due to an improvement in customer service fees of $0.4 million, net gains on sales of small business administration loans ("SBA") of $0.2 million, gains on sales of securities of $0.1 million and an increase of $0.1 million related to the purchase of an additional $15.0 million in bank owned life insurance ("BOLI") during the second quarter 2013. The increase in customer service fees of $0.4 million during the second quarter 2013 was mostly related to service fee increases, an improvement in card interchange income and increased fee income generated by PCM, mostly due to growth in assets under management.

The improvement in noninterest income of $0.8 million in the second quarter 2013 as compared to the same quarter in 2012 was mostly due to a $0.4 million increase in fee income generated by PCM, which was acquired in July 2012, an increase in gains on sales of SBA loans of $0.3 million and an increase in other noninterest income of $0.2 million, mostly related to the purchase of an additional $15.0 million in BOLI during the second quarter 2013. These favorable increases were partially offset by a decline in net gains on sales of securities of $0.3 million.

Assets under management by PCM increased by $20.6 million, or 9.7%, to $232.8 million as of June 30, 2013 as compared to $212.2 million at March 31, 2013, and increased by $68.1 million, or 41.3%, since acquisition in July 2012. PCM has contributed approximately $1.3 million to noninterest income since acquisition.

Excluding net gains on sales of securities of $0.9 million, noninterest income increased $1.6 million to $6.6 million as compared to $5.0 million during the same period in the prior year. This increase was primarily due to an increase in customer service fees of $1.0 million, mostly related to PCM fees of $0.7 million and increased analysis and card interchange income; gains on sales of SBA loans of $0.4 million, and an increase in BOLI income of $0.1 million due to the $15.0 million purchase of additional BOLI during the second quarter 2013.

Noninterest Expense

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


Three Months Ended Six Months Ended ---------------------------- ----------------- June 30, March 31, June 30, June 30, June 30, 2013 2013 2012 2013 2012 -------- --------- -------- -------- -------- (In thousands)Noninterest expense: Salaries and employee benefits $ 7,213 $ 7,441 $ 6,614 $ 14,654 $ 13,471 Occupancy expense 1,598 1,612 1,972 3,210 3,991 Furniture and equipment 745 761 783 1,506 1,604 Amortization of intangible assets 706 707 761 1,413 1,523 Other real estate owned (257) 334 461 77 813 Insurance and assessment 641 608 881 1,249 1,689 Professional fees 853 911 856 1,764 1,484 Prepayment penalty on long term debt - 629 - 629 - Impairment of long-lived assets - - 2,750 - 2,750 Other general and administrative 2,380 2,189 2,438 4,569 4,673 -------- --------- -------- -------- -------- Total noninterest expense $ 13,879 $ 15,192 $ 17,516 $ 29,071 $ 31,998 ======== ========= ======== ======== ========




Noninterest expense decreased $1.3 million to $13.9 million in the second quarter 2013 as compared to $15.2 million in the first quarter 2013 and decreased $3.6 million as compared to $17.5 million in the second quarter 2012.

The decrease in noninterest expense in the second quarter 2013 as compared to the prior linked quarter was primarily due to declines in OREO expenses of $0.6 million, related to net gains on sales and declines in valuation adjustments of several properties and the prepayment penalty of $0.6 million on the early redemption of $15.0 million of fixed, high-cost TruPS and related subordinated debentures during the first quarter 2013.

Excluding the impairment on long-lived assets of $2.8 million related to the closure of two branches in 2012, the decrease in noninterest expense of $0.9 million in the second quarter 2013 as compared to the same quarter in the prior year was mostly due to declines in OREO expenses of $0.7 million, related to net gains on sales and declines in valuation adjustments on several properties and a decline in occupancy expense of $0.4 million, primarily related to branch closures in 2012. These declines in noninterest expense were partially offset with increases in salary and employee benefit expense of $0.6 million, largely due to timing differences in our self-funded medical plan and base salary increases in 2013.

Excluding the impairment on long-lived assets of $2.8 million recognized in June 2012 and the prepayment penalty of $0.6 million on the early redemption of certain of our TruPS and related subordinated debentures recognized in March 2013, discussed above, noninterest expense decreased $0.8 million, or 2.8% for the first six months of 2013 as compared to the same period in 2012. This decrease was mostly related to declines in occupancy expense of $0.8 million, primarily due to the closure of six branches during 2012; OREO expenses of $0.7 million, related to an increase in net gains on sales; and lower insurance and assessments of $0.4 million, primarily due to decreased FDIC premiums. Partially offsetting these decreases in noninterest expense was an increase in salary and employee benefits of $1.2 million, primarily due to increased base salaries and incentives, increases in equity compensation expense and timing differences in our self-funded medical plan.

Balance Sheet


December June 30, 31, Percent June 30, Percent 2013 2012 Change 2012 Change ----------- ----------- ------- ----------- ------- (Dollars in thousands, except per share amounts)Total assets $ 1,866,128 $ 1,886,938 (1.1)% $ 1,750,539 6.6%Average assets, quarter-to-date 1,848,644 1,843,212 0.3% 1,706,862 8.3%Total loans, net of unearned loan fees 1,240,555 1,158,749 7.1% 1,110,161 11.7%Total deposits 1,449,251 1,454,756 (0.4)% 1,378,937 5.1%Equity ratio - GAAP 9.93% 9.97% (0.4)% 10.29% (3.5)%Tangible common equity ratio 9.55% 9.53% 0.2% 9.85% (3.0)%




At June 30, 2013, the Company had total assets of $1.9 billion, which represented a $20.8 million decrease as compared to December 31, 2012 and a $115.6 million increase as compared to June 30, 2012. The decrease in total assets from year end 2012 consisted primarily of decreases in cash and time deposits with banks of $135.6 million and OREO of $13.1 million. These declines were mostly offset by increases in loans, net of unearned fees, of $81.8 million, investments of $26.0 million, BOLI of $15.3 million and a decrease in the allowance for loan losses of $4.9 million. As compared to June 30, 2012, the increase in total assets was mostly due to increases in loans, net of unearned fees, of $130.4 million, investments of $86.8 million, BOLI of $15.6 million and a decrease in the allowance for loan losses of $9.1 million. These increases were partially offset by decreases in cash and time deposits with banks of $106.5 million and OREO of $18.2 million.

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


June 30, March 31, December 31, June 30, 2013 2013 2012 2012 ----------- ----------- ------------ ----------- (In thousands)Commercial and residential real estate $ 787,210 $ 760,735 $ 737,537 $ 730,324Construction 71,833 63,732 72,842 46,413Commercial 270,069 246,883 237,199 216,974Agricultural 10,922 9,787 9,417 10,712Consumer 63,368 62,828 63,095 64,976SBA 35,548 35,671 37,207 39,089Other 2,625 2,361 3,043 3,458 ----------- ----------- ------------ -----------Gross loans 1,241,575 1,181,997 1,160,340 1,111,946Unearned loan fees (1,020) (1,390) (1,591) (1,785) ----------- ----------- ------------ -----------Loans, net of unearned loan fees $ 1,240,555 $ 1,180,607 $ 1,158,749 $ 1,110,161 =========== =========== ============ ===========




For the quarter ending June 30, 2013, loans, net of unearned fees grew $59.9 million, or 5.1% as compared to the prior linked quarter and grew $81.8 million as compared to December 31, 2012, or 14.2% on an annualized basis. As compared to the second quarter 2012, loans, net of unearned fees, grew $130.4 million, or 11.7%. The growth in loans was primarily the result of new customer acquisition, reflected in continued growth in new commitments, supplemented by increased utilization of existing lines of credit and declining loan payoffs.

On a linked quarter basis, the increase in loans during the second quarter 2013 was primarily due to increases in commercial and residential real estate loans of $26.5 million, mostly as a result of growth in jumbo mortgages of $25.2 million combined with growth in commercial loans of $23.2 million.

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


June 30, March 31, December 31, June 30, 2013 2013 2012 2012 ----------- ----------- ------------ ----------- (In thousands)Noninterest bearing deposits $ 505,782 $ 520,008 $ 564,215 $ 546,229Interest-bearing demand and NOW 332,541 299,010 285,679 270,940Money market 319,957 326,767 312,724 280,767Savings 105,853 107,675 100,704 97,497Time 185,118 188,857 191,434 183,504 ----------- ----------- ------------ -----------Total deposits $ 1,449,251 $ 1,442,317 $ 1,454,756 $ 1,378,937 =========== =========== ============ ===========




Non-maturing deposits increased $10.7 million in the second quarter 2013 as compared to the first quarter 2013 and increased $68.7 million, or 5.7%, as compared to the second quarter 2012. Time deposits decreased $3.7 million as of June 30, 2013 as compared to March 31, 2013 and increased $1.6 million as compared to June 30, 2012. At June 30, 2013, noninterest-bearing deposits as a percentage of total deposits was 34.9% as compared to 36.1% at March 31, 2013 and 39.6% at June 30, 2012.

During the second quarter 2013, securities sold under agreements to repurchase decreased $35.9 million from March 31, 2013 and increased $11.9 million from June 30, 2012 to $24.9 million at June 30, 2013. The decrease from the first quarter 2013 was primarily related to a single depositor whose balance was re-deployed into the depositor's operations during the second quarter 2013, as expected.

Total borrowings were $167.9 million at June 30, 2013 consisting of $110.2 million of term borrowings and $57.7 million of advances on our line of credit both with the Federal Home Loan Bank ("FHLB"). Total borrowings were $110.2 million at March 31, 2013 and June 30, 2012, respectively, and consisted of term notes with the FHLB.

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:


Minimum Requirement Ratio at Ratio at Minimum for "Well- June 30, December 31, Capital Capitalized" 2013 2012 Requirement Institution -------- ------------ ----------- ------------Total Risk-Based Capital Ratio Consolidated 14.96% 16.27% 8.00% N/A Guaranty Bank and Trust Company 14.37% 15.52% 8.00% 10.00%Tier 1 Risk-Based Capital Ratio Consolidated 13.71% 15.02% 4.00% N/A Guaranty Bank and Trust Company 13.12% 14.26% 4.00% 6.00%Leverage Ratio Consolidated 11.46% 11.93% 4.00% N/A Guaranty Bank and Trust Company 10.97% 11.35% 4.00% 5.00%




As compared to December 31, 2012, the declines in the consolidated total risk-based capital ratio and Tier 1 risk-based capital ratio was primarily due to the early redemption of $15.0 million of the company's TruPS and related subordinated debentures during the first quarter 2013 and loan growth during the first six months of 2013. The redemption of the TruPS and related subordinated debentures was funded by a dividend from the Bank. All three ratios continue to remain well above the minimum capital requirements for holding companies and well capitalized requirements for banks.

Asset Quality

The following table presents select asset quality data as of the dates indicated:


December September June 30, March 31, 31, 30, June 30, 2013 2013 2012 2012 2012 -------- --------- --------- --------- -------- (Dollars in thousands)Nonaccrual loans and leases $ 19,430 $ 31,482 $ 13,692 $ 21,185 $ 21,291Accruing loans past due 90 days or more (1) 84 40 224 543 - -------- --------- --------- --------- --------Total nonperforming loans (NPLs) $ 19,514 $ 31,522 $ 13,916 $ 21,728 $ 21,291Other real estate owned and foreclosed assets 6,460 8,606 19,580 23,532 24,640 -------- --------- --------- --------- --------Total nonperforming assets (NPAs) $ 25,974 $ 40,128 $ 33,496 $ 45,260 $ 45,931 ======== ========= ========= ========= ========Total classified assets $ 36,590 $ 52,535 $ 58,635 $ 74,514 $ 77,910 ======== ========= ========= ========= ========Accruing loans past due 30- 89 days (1) $ 6,873 $ 3,686 $ 4,270 $ 7,678 $ 18,448 ======== ========= ========= ========= ========Allowance for loan losses $ 20,218 $ 24,060 $ 25,142 $ 28,597 $ 29,307 ======== ========= ========= ========= ========Selected ratios:NPLs to loans, net of unearned loan fees 1.57% 2.67% 1.20% 1.94% 1.92%NPAs to total assets 1.39% 2.18% 1.78% 2.47% 2.62%Allowance for loan losses to NPLs 103.61% 76.33% 180.67% 131.61% 137.65%Allowance for loan losses to loans, net of unearned loan fees 1.63% 2.04% 2.17% 2.56% 2.64%Loans 30-89 days past due to loans, net of unearned loan fees 0.55% 0.31% 0.37% 0.69% 1.66%Texas ratio (2) 11.70% 18.17% 14.37% 19.49% 19.92%Classified asset ratio (3) 16.48% 23.78% 25.16% 32.10% 33.79%




(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) Texas ratio defined as total NPAs divided by subsidiary bank only Tier 1 Capital plus allowance for loan losses.
(3) Classified asset ratio defined as total classified assets to subsidiary bank only Tier 1 Capital plus allowance for loan losses.

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


90 days + 30-89 Past Due Non- Days Past and Still Accrual Total TotalJune 30, 2013 Due Accruing Loans Past Due Loans --------- --------- --------- --------- ----------- (In thousands)Commercial and residential real estate $ 3,762 $ - $ 5,926 $ 9,688 $ 786,563Construction - - 10,812 10,812 71,774Commercial 2,958 84 865 3,907 269,847Consumer 153 - 810 963 63,316Other - - 1,017 1,017 49,055 --------- --------- --------- --------- -----------Total $ 6,873 $ 84 $ 19,430 $ 26,387 $ 1,240,555 ========= ========= ========= ========= =========== 90 days + 30-89 Past Due Non- Days Past and Still Accrual Total TotalDecember 31, 2012 Due Accruing Loans Past Due Loans --------- --------- --------- --------- ----------- (In thousands)Commercial and residential real estate $ 832 $ 224 $ 8,034 $ 9,090 $ 736,524Construction - - - - 72,742Commercial 2,671 - 3,005 5,676 236,874Consumer 140 - 1,332 1,472 63,009Other 627 - 1,321 1,948 49,600 --------- --------- --------- --------- -----------Total $ 4,270 $ 224 $ 13,692 $ 18,186 $ 1,158,749 ========= ========= ========= ========= ===========




At June 30, 2013, classified assets as a percentage of capital and allowance for loan losses were 16.5%, a favorable decline from 25.2% at December 31, 2012 and 33.8% at June 30, 2012. Overall classified assets declined by $16.0 million, or 30.4%, during the second quarter 2013, and decreased by $41.3 million, or 53.0%, for the twelve months ended June 30, 2013.

During the second quarter 2013, nonperforming assets decreased $14.2 million as compared to the prior quarter primarily due to the decrease in nonaccrual loans. The decrease in nonaccrual loans was related to a negotiated payoff and partial charge-off of an out-of-state loan participation purchased nearly five years ago.

Net charge-offs in the second quarter 2013 were $3.8 million as compared to $1.1 million in the first quarter 2013 and $1.3 million in the second quarter 2012. The net charge-offs in the second quarter 2013 primarily consisted of a single charge-off of $4.6 million on an out-of-state loan participation previously provided for in our allowance for loan losses, partially offset by $1.1 million in recoveries during the quarter. The coverage ratio, defined as allowance for loan losses divided by nonperforming loans, increased from 76.3% at March 31, 2013 to 103.6% at June 30, 2013. The increase in the coverage ratio reflects the reduction in nonperforming loans, as discussed above.

During the first six months of 2013, the Company did not record a provision for loan losses compared to a $1.5 million provision in the first six months of 2012. The decrease in provision for loan losses over last year reflects an overall improvement in asset quality and declines in net historical charge-offs.

Shares Outstanding

As of June 30, 2013, the Company had 21,392,485 shares of common stock outstanding, consisting of 20,373,485 shares of voting common stock and 1,019,000 shares of non-voting common stock. At June 30, 2013, total common shares outstanding include 520,682 shares of unvested stock awards.

Non-GAAP Financial Measures

This press release contains certain non-GAAP financial measures related to tangible assets, including tangible book value and tangible common equity, and pre-tax operating earnings adjusted for (if any) provision (credit) for loan losses, other real estate owned expenses, debt termination expense, 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 Six Months Ended ----------------------------------- --------------------- June 30, March 31, June 30, June 30, June 30, 2013 2013 2012 2013 2012 ----------- ----------- ----------- ---------- ---------- (Dollars in thousands)Income before income taxes $ 5,571 $ 3,136 $ 278 8,707 3,195Plus: Provision for loan losses - - 500 - 1,500 Expenses related to other real estate owned, net (257) 334 461 77 813 Prepayment penalty on long term debt - 629 - 629 - Impairment of long-lived assets - - 2,750 - 2,750Less: Gain on sale of securities 54 - 342 54 964 ----------- ----------- ----------- ---------- ----------Pre-tax operating earnings $ 5,260 $ 4,099 $ 3,647 9,359 7,294 =========== =========== =========== ========== ==========Weighted basic average common shares outstanding: 20,860,228 20,844,384 20,782,861 20,854,858 20,780,713Fully diluted average common shares outstanding: 20,941,486 20,917,693 20,847,792 20,934,521 20,857,264Pre-tax operating earnings per common share- basic: $ 0.25 $ 0.20 $ 0.18 0.45 0.35Pre-tax operating earnings per common share- diluted: $ 0.25 $ 0.20 $ 0.18 0.45 0.35




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


June 30, December 31, June 30, 2013 2012 2012 ------------ ------------ ------------ (Dollars in thousands, except per share amounts)Total stockholders' equity $ 185,324 $ 188,200 $ 180,121Less: Intangible assets (7,935) (9,348) (8,440) ------------ ------------ ------------Tangible common equity $ 177,389 $ 178,852 $ 171,681 ============ ============ ============Number of common shares outstanding 21,392,485 21,169,521 21,243,138Book value per common share $ 8.66 $ 8.89 $ 8.48Tangible book value per common share $ 8.29 $ 8.45 $ 8.08




Tangible Common Equity Ratio


June 30, December 31, June 30, 2013 2012 2012 ------------ ------------ ------------ (Dollars in thousands, except per share amounts)Total stockholders' equity $ 185,324 $ 188,200 $ 180,121Less: Intangible assets (7,935) (9,348) (8,440) ------------ ------------ ------------Tangible common equity $ 177,389 178,852 171,681 ============ ============ ============Total assets $ 1,866,128 $ 1,886,938 $ 1,750,539Less: Intangible assets (7,935) (9,348) (8,440) ------------ ------------ ------------Tangible assets $ 1,858,193 $ 1,877,590 $ 1,742,099 ============ ============ ============Equity ratio - GAAP (Total stockholders' equity / total assets) 9.93% 9.97% 10.29%Tangible common equity ratio (Tangible common equity / tangible assets) 9.55% 9.53% 9.85%




About Guaranty Bancorp

Guaranty Bancorp is a bank holding company that operates 28 branches in Colorado through a single bank, Guaranty Bank and Trust Company. The Bank provides banking and other financial services including commercial and industrial, real estate, construction, energy, consumer and agricultural loans throughout its targeted Colorado markets to consumers and small to medium-sized businesses, including the owners and employees of those businesses. The Bank and its subsidiary also provide wealth management services, including private banking, investment management, jumbo mortgage loans and trust 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 Company's operations; general economic and business conditions in those areas in which the Company operates; demographic changes; competition; fluctuations in interest rates; continued ability to attract and employ qualified personnel; ability to receive regulatory approval for 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; changes in the financial performance and/or condition of our borrowers and the ability of our borrowers to perform under the terms of their loans and terms of other credit agreements; political instability, acts of war or terrorism and natural disasters; and additional "Risk Factors" referenced in the Company's most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission, as supplemented from time to time. When relying on forward-looking statements to make decisions with respect to the Company, investors and others are cautioned to consider these and other risks and uncertainties. The Company can give no assurance that any goal or plan or expectation set forth in forward-looking statements can be achieved and readers are cautioned not to place undue reliance on such statements, which speak only as of the date made. The forward-looking statements are made as of the date of this press release, and the Company does not intend, and assumes no obligation, to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements.


GUARANTY BANCORP AND SUBSIDIARIES Unaudited Consolidated Balance Sheets June 30, December 31, June 30, 2013 2012 2012 ----------- ------------ ----------- (In thousands)AssetsCash and due from banks $ 30,613 $ 163,217 $ 137,133Time deposits with banks 5,000 8,000 5,000Securities available for sale, at fair value 432,218 413,382 362,039Securities held to maturity 34,772 31,283 21,687Bank stocks, at cost 17,981 14,262 14,425 ----------- ------------ ----------- Total investments 484,971 458,927 398,151 ----------- ------------ -----------Loans, net of unearned loan fees 1,240,555 1,158,749 1,110,161 Less allowance for loan losses (20,218) (25,142) (29,307) ----------- ------------ ----------- Net loans 1,220,337 1,133,607 1,080,854 ----------- ------------ -----------Premises and equipment, net 46,265 46,918 47,534Other real estate owned and foreclosed assets 6,460 19,580 24,640Other intangible assets, net 7,935 9,348 8,440Securities sold, not yet settled - 5,878 -Bank owned life insurance 30,902 15,564 15,321Other assets 33,645 25,899 33,466 ----------- ------------ ----------- Total assets $ 1,866,128 $ 1,886,938 $ 1,750,539 =========== ============ ===========Liabilities and Stockholders' EquityLiabilities: Deposits: Noninterest-bearing demand $ 505,782 $ 564,215 $ 546,229 Interest-bearing demand and NOW 332,541 285,679 270,940 Money market 319,957 312,724 280,767 Savings 105,853 100,704 97,497 Time 185,118 191,434 183,504 ----------- ------------ ----------- Total deposits 1,449,251 1,454,756 1,378,937 ----------- ------------ -----------Securities sold under agreement to repurchase and federal funds purchased 24,894 67,040 13,028Borrowings 167,903 110,163 110,170Subordinated debentures 25,774 41,239 41,239Securities purchased, not yet settled 5,000 16,943 12,557Interest payable and other liabilities 7,982 8,597 14,487 ----------- ------------ ----------- Total liabilities 1,680,804 1,698,738 1,570,418 ----------- ------------ -----------Stockholders' equity: Common stock and Additional paid- in capital - Common stock 706,086 705,389 705,058 Accumulated deficit (412,389) (417,957) (423,907) Accumulated other comprehensive income (loss) (5,910) 3,165 1,333 Treasury stock (102,463) (102,397) (102,363) ----------- ------------ ----------- Total stockholders' equity 185,324 188,200 180,121 ----------- ------------ ----------- Total liabilities and stockholders' equity $ 1,866,128 $ 1,886,938 $ 1,750,539 =========== ============ =========== GUARANTY BANCORP AND SUBSIDIARIES Unaudited Consolidated Statements of Operations Three Months Ended Six Months Ended June 30, June 30, ----------------------- ------------------------ 2013 2012 2013 2012 ----------- ----------- ------------ ----------- (In thousands, except share and per share data)Interest income: Loans, including fees $ 14,104 $ 14,511 $ 28,186 $ 28,993 Investment securities: Taxable 2,322 2,366 4,587 4,759 Tax-exempt 786 618 1,579 1,235 Dividends 170 153 326 311 Federal funds sold and other 67 58 101 100 ----------- ----------- ------------ ----------- Total interest income 17,449 17,706 34,779 35,398 ----------- ----------- ------------ -----------Interest expense: Deposits 615 711 1,250 1,488Securities sold under agreement to repurchase and federal funds purchased 11 12 29 24 Borrowings 849 827 1,667 1,654 Subordinated debentures 235 773 716 1,549 ----------- ----------- ------------ ----------- Total interest expense 1,710 2,323 3,662 4,715 ----------- ----------- ------------ ----------- Net interest income 15,739 15,383 31,117 30,683Provision for loan losses - 500 - 1,500 ----------- ----------- ------------ ----------- Net interest income, after provision for loan losses 15,739 14,883 31,117 29,183Noninterest income: Customer service and other fees 3,018 2,382 5,638 4,653 Gain on sale of securities 54 342 54 964 Gain on sale of SBA loans 287 - 423 - Other 352 187 546 393 ----------- ----------- ------------ ----------- Total noninterest income 3,711 2,911 6,661 6,010Noninterest expense: Salaries and employee benefits 7,213 6,614 14,654 13,471 Occupancy expense 1,598 1,972 3,210 3,991 Furniture and equipment 745 783 1,506 1,604 Amortization of intangible assets 706 761 1,413 1,523 Other real estate owned, net (257) 461 77 813 Insurance and assessments 641 881 1,249 1,689 Professional fees 853 856 1,764 1,484 Prepayment penalty on long term debt - - 629 - Impairment of long-lived assets - 2,750 - 2,750 Other general and administrative 2,380 2,438 4,569 4,673 ----------- ----------- ------------ ----------- Total noninterest expense 13,879 17,516 29,071 31,998 ----------- ----------- ------------ ----------- Income before income taxes 5,571 278 8,707 3,195Income tax expense (benefit) 1,753 (5,914) 2,617 (5,914) ----------- ----------- ------------ ----------- Net income $ 3,818 $ 6,192 $ 6,090 $ 9,109 =========== =========== ============ ===========Earnings per common share- basic: $ 0.18 $ 0.30 $ 0.29 $ 0.44Earnings per common share- diluted: 0.18 0.30 0.29 0.44Dividend declared per common share: $ 0.03 $ - $ 0.03 $ -Weighted average common shares outstanding-basic: 20,860,228 20,782,861 20,854,858 20,780,713Weighted average common shares outstanding- diluted: 20,941,486 20,847,792 20,934,521 20,857,264




GUARANTY BANCORP AND SUBSIDIARIES Unaudited Consolidated Average Balance Sheets QTD Average YTD Average ----------------------------------- ----------------------- December June 30, 31, June 30, June 30, June 30, 2013 2012 2012 2013 2012 ----------- ----------- ----------- ----------- ----------- (In thousands)AssetsInterest earning assets Loans, net of unearned loan fees $ 1,215,104 $ 1,129,893 $ 1,110,035 $ 1,189,883 $ 1,107,358 Securities 503,019 451,342 388,959 500,784 383,040 Other earning assets 28,826 159,038 103,783 47,051 93,446 ----------- ----------- ----------- ----------- -----------Average earning assets 1,746,949 1,740,273 1,602,777 1,737,718 1,583,844Other assets 101,695 102,939 104,085 97,223 103,854 ----------- ----------- ----------- ----------- -----------Total average assets $ 1,848,644 $ 1,843,212 $ 1,706,862 $ 1,834,941 $ 1,687,698 =========== =========== =========== =========== ===========Liabilities and Stockholders' EquityAverage liabilities:Average deposits: Noninterest- bearing deposits $ 510,596 $ 521,000 $ 502,209 $ 514,583 $ 475,571 Interest- bearing deposits 923,931 895,729 847,074 910,367 855,684 ----------- ----------- ----------- ----------- ----------- Average deposits 1,434,527 1,416,729 1,349,283 1,424,950 1,331,255Other interest- bearing liabilities 214,856 232,004 175,053 211,539 174,502Other liabilities 8,280 8,736 6,581 8,604 7,431 ----------- ----------- ----------- ----------- -----------Total average liabilities 1,657,663 1,657,469 1,530,917 1,645,093 1,513,188Average stockholders' equity 190,981 185,743 175,945 189,848 174,510 ----------- ----------- ----------- ----------- -----------Total average liabilities and stockholders' equity $ 1,848,644 $ 1,843,212 $ 1,706,862 $ 1,834,941 $ 1,687,698 =========== =========== =========== =========== =========== GUARANTY BANCORP Unaudited Credit Quality Measures Quarter Ended -------------------------------------------------- December September June 30, March 31, 31, 30, June 30, 2013 2013 2012 2012 2012 --------- --------- --------- --------- --------- (Dollars in thousands)Nonaccrual loans and leases $ 19,430 $ 31,482 $ 13,692 $ 21,185 $ 21,291Accruing loans past due 90 days or more 84 40 224 543 - --------- --------- --------- --------- --------- Total nonperforming loans $ 19,514 $ 31,522 $ 13,916 $ 21,728 $ 21,291 --------- --------- --------- --------- ---------Other real estate owned and foreclosed assets 6,460 8,606 19,580 23,532 24,640 --------- --------- --------- --------- --------- Total nonperforming assets $ 25,974 $ 40,128 $ 33,496 $ 45,260 $ 45,931 ========= ========= ========= ========= =========Total classified assets $ 36,590 $ 52,535 $ 58,635 $ 74,514 $ 77,910 ========= ========= ========= ========= =========Nonperforming loans $ 19,514 $ 31,522 $ 13,916 $ 21,728 $ 21,291Performing trouble debt restructurings 2,675 1,268 3,838 - -Allocated allowance for loan losses (1,524) (6,474) (2,654) (3,774) (1,859) --------- --------- --------- --------- --------- Net investment in impaired loans $ 20,665 $ 26,316 $ 15,100 $ 17,954 $ 19,432 ========= ========= ========= ========= =========Accruing loans past due 30-89 days $ 6,873 $ 3,686 $ 4,270 $ 7,678 $ 18,448 ========= ========= ========= ========= =========Charged-off loans $ 4,996 $ 1,523 $ 1,199 $ 1,067 $ 2,062Recoveries (1,154) (441) (1,244) (357) (794) --------- --------- --------- --------- --------- Net charge-offs $ 3,842 $ 1,082 $ (45) $ 710 $ 1,268 ========= ========= ========= ========= =========Provision for loan loss $ - $ - $ (3,500) $ - $ 500 ========= ========= ========= ========= =========Allowance for loan losses $ 20,218 $ 24,060 $ 25,142 $ 28,597 $ 29,307 ========= ========= ========= ========= =========Allowance for loan losses to loans, net of unearned loan fees 1.63% 2.04% 2.17% 2.56% 2.64%Allowance for loan losses to nonaccrual loans 104.06% 76.42% 183.63% 134.99% 137.65%Allowance for loan losses to nonperforming loans 103.61% 76.33% 180.67% 131.61% 137.65%Nonperforming assets to loans, net of unearned loan fees and other real estate owned 2.08% 3.37% 2.84% 3.96% 4.05%Nonperforming assets to total assets 1.39% 2.18% 1.78% 2.47% 2.62%Nonaccrual loans to loans, net of unearned loan fees 1.57% 2.67% 1.18% 1.89% 1.92%Nonperforming loans to loans, net of unearned loan fees 1.57% 2.67% 1.20% 1.94% 1.92%Annualized net charge- offs to average loans 1.27% 0.38% (0.02)% 0.26% 0.46%





Contacts:
Paul W. Taylor
President and Chief Executive Officer
Guaranty Bancorp
1331 Seventeenth Street, Suite 345
Denver, CO 80202
303/293-5563


Christopher G. Treece
E.V.P., Chief Financial Officer and Secretary
Guaranty Bancorp
1331 Seventeenth Street, Suite 345
Denver, CO 80202
303/675-1194