Guaranty Bancorp Announces 2012 Annual and Fourth Quarter Financial Results

DENVER, CO--(Marketwire - Jan 28, 2013) - Guaranty Bancorp (NASDAQ: GBNK)

• Loan growth of $60.6 million, or 5.5% during 2012 
• Increase in pre-tax net income of $5.5 million, or 87.2%, as compared to 2011
• Reduction in classified assets of $24.7 million, or 29.6%, during 2012, further reduced by an additional $10.9 million due to the sale of our largest classified asset in January 2013
• Previously announced redemption of $15.0 million of our trust preferred securities scheduled for first quarter 2013 will reduce interest expense by $1.6 million annually

Guaranty Bancorp (NASDAQ: GBNK), a Colorado-based community bank holding company, today reported fourth quarter 2012 net income of $3.1 million, or $0.03 earnings per basic and diluted common share, compared to net income of $2.3 million, or $0.02 earnings per basic and diluted common share in the fourth quarter 2011.

"We could not be more pleased with our performance in 2012," said Paul W. Taylor, President and CEO. "We successfully executed on our business plans to grow loans, increase deposits, and improve our credit quality. Our 2012 loan growth was $60.6 million, or 5.5%, despite a $71.5 million reduction in our purchased loan participations. We also grew our core deposits by $153.6 million, or 13.8% during 2012, further enhancing our high liquidity level. Continued focus on improving our credit quality metrics resulted in a substantial reduction in our classified asset ratio to 25.2% at the end of 2012 as compared to 36.6% at the end of the previous year. On a proforma basis, our classified asset ratio at December 31, 2012 improved to 20.5% after consideration of the sale of our largest classified asset on January 28, 2013."

Taylor continued, "Private Capital Management, the Colorado based investment management firm we acquired in July of 2012, also delivered outstanding results in just five short months. Assets under management grew by $14.5 million, or 8.7%, since the close of the acquisition. Additionally, the firm contributed $0.5 million to noninterest income in 2012. These accomplishments, in addition to a continued focus on enhancing profitability, make Guaranty Bancorp well positioned for further growth in 2013."

The $0.8 million improvement in net income in the fourth quarter 2012 compared to the same quarter in 2011 was primarily due to a $2.3 million increase in pre-tax income, offset by a $1.5 million increase in tax expense. The improvement in pre-tax income was primarily due to a $4.5 million decrease in provision for loan loss, due to improvements in credit quality and reduced charge-off levels, and an increase in noninterest income of $1.0 million, primarily due to increases in customer service fees and gains on sale of securities. These improvements were partially offset by a $3.1 million increase in noninterest expense, primarily driven by a $3.0 million write-down on the Company's single largest other real estate owned ("OREO") property, which was subsequently sold in January 2013.

Earnings per basic and diluted common share improved to $0.14 for the year ended December 31, 2012 as compared to a loss per basic and diluted common share of $0.21 from the prior year. The prior year loss per common share calculation included a non-cash adjustment of approximately $19.8 million, or $0.30 per basic and diluted common share, related to three quarters of paid-in-kind preferred stock dividends and the mandatory accelerated conversion of the Company's Series A Convertible Preferred Stock into common stock in September 2011.

For the year ended December 31, 2012, net income improved by $8.7 million, or 137.1%, to $15.1 million compared to $6.4 million for the year ended December 31, 2011, primarily due to the lower level of provision for loan losses of $7.0 million, attributable to continued improvements in credit quality in 2012; the reversal of the remaining deferred tax asset valuation allowance, discussed below; and the reduction in interest expense of $5.3 million, mostly due to reductions in deposit rates and the early payoff of several Federal Home Loan Bank ("FHLB") borrowings in 2011. These improvements were partially offset by a reduction in interest income of $4.7 million, due to declines in average earning assets yields, an increase in noninterest expense of $1.6 million and a decrease in noninterest income of $0.4 million, primarily due to reductions in net gains on sales of securities. The increase in noninterest expense was due to the net increase in OREO expense of $2.8 million, mostly due to the write-down discussed above, and the impairment related to the closure of two branches of $2.8 million, offset by a decrease in intangible amortization of $1.0 million and the FHLB prepayment penalty of $2.7 million recorded in 2011. 

The Company had a deferred tax asset valuation allowance of $6.6 million at December 31, 2011. During the second quarter 2012, the remaining deferred tax asset valuation allowance of $5.7 million was reversed based on the Company's determination that it was more likely than not that the entire deferred tax asset would be realized. Subsequent to the reversal of the deferred tax asset valuation allowance, the Company resumed recording income tax expense.

Key Financial Measures
Income Statement

	Quarter Ended									Year Ended
	December 31, 2012			September 30, 2012			December 31, 2011			December 31, 2012			December 31, 2011
	(Dollars in thousands, except per share amounts)
Net income	$	3,120		$	2,830		$	2,276		$	15,059		$	6,352
Net income (loss) to common stockholders	$	3,120		$	2,830		$	2,276		$	15,059		$	(13,434	)
Earnings (loss) per common share	$	0.03		$	0.02		$	0.02		$	0.14		$	(0.21	)
Return on average assets		0.67	%		0.63	%		0.54	%		0.86	%		0.36	%
Net interest margin		3.48	%		3.46	%		3.86	%		3.67	%		3.61	%
Efficiency ratio (tax equivalent)		88.16	%		71.56	%		74.84	%		77.05	%		77.75	%

Balance Sheet

	December 31, 2012			September 30, 2012			% Change			December 31, 2011			% Change
	(Dollars in thousands, except per share amounts)
Cash and cash equivalents	$	121,217		$	127,823		(5.2	)%		$	109,225		11.0	%
Time deposits with banks		50,000			40,000		25.0	%			-		100.0	%
Total investments		458,927			436,386		5.2	%			386,141		18.8	%
Total loans, net of unearned discount		1,158,749			1,118,968		3.6	%			1,098,140		5.5	%
Allowance for loan losses		(25,142	)		(28,597	)	(12.1	)%			(34,661	)	(27.5	)%
Total assets		1,886,938			1,834,978		2.8	%			1,689,668		11.7	%
Average earning assets, quarter-to-date		1,740,273			1,670,300		4.2	%			1,575,193		10.5	%
Total deposits		1,454,756			1,395,096		4.3	%			1,313,786		10.7	%
Book value per common share		1.78			1.74		2.3	%			1.62		9.9	%
Tangible book value per common share		1.69			1.65		2.4	%			1.53		10.5	%
Equity ratio - GAAP		9.97	%		10.09	%	(1.2	)%			10.12	%	(1.5	)%
Tangible common equity ratio		9.53	%		9.59	%	(0.6	)%			9.59	%	(0.6	)%
Total risk-based capital ratio		16.27	%		16.46	%	(1.2	)%			16.33	%	(0.4	)%

Net Interest Income and Margin

	Quarter Ended												Year Ended
	December 31, 2012				September 30, 2012				December 31, 2011				December 31, 2012				December 31, 2011
	(Dollars in thousands)
Net interest income	$	15,217			$	14,511			$	15,325			$	60,411			$	59,894
Interest rate spread		3.21	%			3.15	%			3.54	%			3.37	%			3.25	%
Net interest margin		3.48	%			3.46	%			3.86	%			3.67	%			3.61	%
Net interest margin, fully tax equivalent		3.57	%			3.55	%			3.95	%			3.77	%			3.68	%
Average cost of deposits, including noninterest bearing deposits		0.19	%			0.20	%			0.26	%			0.21	%			0.49	%

Net interest income increased $0.7 million from $14.5 million in the third quarter 2012 to $15.2 million in the fourth quarter 2012 and decreased $0.1 million as compared to $15.3 million for the fourth quarter 2011. Net interest margin increased two basis points from 3.46% in the third quarter 2012 to 3.48% in the fourth quarter 2012 and declined 38 basis points from 3.86% in the fourth quarter 2011.

The increase in net interest income of $0.7 million from the third quarter 2012 to the fourth quarter 2012 was due to an increase in interest income of $0.6 million and a decrease in interest expense of $0.1 million. Interest income increased primarily due to increases in average loan and investment balances of $33.5 million and $48.3 million, respectively. The decrease in interest expense was the result of a reduction in subordinated debentures interest due to the payment of compounding, deferred interest during the third quarter 2012.

The decline in net interest income of $0.1 million for the fourth quarter 2012 as compared to the same quarter in 2011 was due to a reduction in interest income of $0.4 million, partially offset by a reduction in interest expense of $0.3 million. The decline in interest income was mostly due to a decline in loan income of $0.2 million and a decline in investment income of $0.2 million. The decline in interest expense was due to a change in the deposit mix from higher-cost time and money market deposits to lower yielding demand accounts, reductions in average time deposit rates and a reduction in subordinated debentures interest due to the payment of compounding, deferred interest during the third quarter 2012.

On a year-to-date basis, the net interest margin improved six basis points from 3.61% in 2011 to 3.67% in 2012, as a result of an increase in net interest income of $0.5 million and a reduction in average earning assets of $13.8 million. The improvement in net interest income was primarily due to a decrease in interest expense of $5.3 million caused by reductions in both average balances and average rates on time certificates of deposit. The improvement in interest expense was partially offset by a decrease in interest income of $4.7 million, primarily due to declines in yields on loans and investments.

Noninterest Income

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

			Quarter Ended										Year Ended
			December 31, 2012			September 30, 2012			December 31, 2011				December 31, 2012			December 31, 2011
			(In thousands)
Noninterest income:
	Customer service and other fees		$	2,640		$	2,616		$	2,320			$	9,909		$	9,413
	Gain on sale of securities			817			746			283				2,527			3,703
	Gain on sale of SBA loans			-			203			-				203			-
	Other			309			250			197				952			829
	Total noninterest income		$	3,766		$	3,815		$	2,800			$	13,591		$	13,945

Overall noninterest income remained relatively consistent in the fourth quarter 2012, as compared to prior quarter. Increases in gains on sale of securities and a gain on sale of bank facilities of $0.1 million each during the fourth quarter 2012 were offset by the gain on sale of Small Business Administration ("SBA") loans of $0.2 million during the third quarter 2012.

Noninterest income increased $1.0 million to $3.8 million in the fourth quarter 2012, as compared to $2.8 million in the fourth quarter 2011, primarily due to an increase in the gain on sale of securities of $0.5 million, an increase in customer service fees of $0.3 million related to investment management fees generated by Private Capital Management ("PCM"), acquired in July 2012, and net gains on sales of bank facilities of $0.1 million. 

For the year ended December 31, 2012, noninterest income decreased $0.3 million to $13.6 million, as compared to $13.9 million during the prior year, primarily due to the decrease in the net gains on sales of securities of $1.2 million, partially offset by the gains on sales of SBA loans and bank facilities of $0.4 million, as well as the increase in customer service fees of $0.5 million, primarily investment management fees generated by PCM, as discussed in the preceding paragraph.

Noninterest Expense

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

			Quarter Ended										Year Ended
			December 31, 2012			September 30, 2012			December 31, 2011				December 31, 2012			December 31, 2011
			(In thousands)
Noninterest expense:
	Salaries and employee benefits		$	6,832		$	6,466		$	6,716			$	26,769		$	26,059
	Occupancy expense			1,550			1,712			1,967				7,253			7,513
	Furniture and equipment			760			779			846				3,143			3,508
	Amortization of intangible assets			812			803			1,017				3,138			4,091
	Other real estate owned			3,209			348			240				4,370			1,559
	Insurance and assessment			677			771			845				3,137			4,053
	Professional fees			1,543			1,062			690				4,089			3,528
	Prepayment penalty on long term debt			-			-			-				-			2,672
	Impairment of long-lived assets			-			-			-				2,750			-
	Other general and administrative			2,539			2,253			2,528				9,465			9,504
	Total noninterest expense		$	17,922		$	14,194		$	14,849			$	64,114		$	62,487

Noninterest expense increased $3.7 million to $17.9 million in the fourth quarter 2012 as compared to $14.2 million in the third quarter 2012. The increase was primarily due to an increase in OREO expenses driven by a $3.0 million write-down of a single property, which was subsequently sold in January 2013. In addition, professional fees increased $0.5 million, primarily due to legal expenses, and salary and benefits increased $0.4 million. These increases were partially of offset by a decline in occupancy expense of $0.2 million. 

As compared to the fourth quarter 2011, noninterest expense increased $3.1 million primarily due to the OREO write-down discussed above. In addition, professional fees increased $0.9 million primarily related to legal expenses, which were partially offset by declines in occupancy expense of $0.4 million due to savings related to branch closures and declines in insurance and assessment expense of $0.2 million related to decreases in FDIC and other insurance premiums.

Noninterest expense increased $1.6 million to $64.1 million for the year ended December 31, 2012 as compared to $62.5 million for the same period in 2011. Increases in noninterest expense consisted of the increases in OREO expenses of $2.8 million, mostly due to the write-down discussed above, the impairment charge related to the closure of two branches of $2.8 million, an increase in professional fees of $0.6 million related to legal expenses, and an increase in salary and benefit expense of $0.7 million, primarily related to annual salary increases. These increases in noninterest expense were partially offset by the prepayment penalty on FHLB borrowings of $2.7 million incurred in September 2011; reductions in loan collection expenses of $1.0 million, as the result of improved credit quality; decrease in amortization of intangible assets of $1.0 million; reductions in insurance and assessments of $0.9 million, related to lower insurance premiums and FDIC assessments; and reductions in occupancy and furniture and equipment of $0.6 million due to savings related to branch closures in 2012.

Balance Sheet

	December 31, 2012			September 30, 2012			% Change		December 31, 2011			% Change
	(Dollars in thousands)
Total assets	$	1,886,938		$	1,834,978		2.8	%	$	1,689,668		11.7	%
Average assets, quarter-to-date		1,843,212			1,776,557		3.8	%		1,682,168		9.6	%
Total loans, net of unearned discount		1,158,749			1,118,968		3.6	%		1,098,140		5.5	%
Total deposits		1,454,756			1,395,096		4.3	%		1,313,786		10.7	%
Equity ratio - GAAP		9.97	%		10.09	%	(1.2	)%		10.12	%	(1.5	)%
Tangible common equity ratio		9.53	%		9.59	%	(0.6	)%		9.59	%	(0.6	)%

At December 31, 2012, the Company had total assets of $1.9 billion, which represented a $52.0 million increase as compared to September 30, 2012 and a $197.3 million increase as compared to December 31, 2011. The increase in assets from September 30, 2012 consisted primarily of an increase in loans, net of unearned discount, of $39.8 million and an increase in investments of $22.5 million, partially offset by a decline in other assets of $11.2 million related to securities sold not yet settled. As compared to December 31, 2011, the increase in total assets was primarily due to an increase in investments of $72.8 million, an increase in loans, net of unearned discount, of $60.6 million, an increase in time deposits with banks of $50.0 million, and an increase in cash and cash equivalents of $12.0 million, partially offset by a decrease in OREO of $9.5 million. In addition, the allowance for loan losses decreased by $9.5 million.

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

		December 31, 2012				September 30, 2012				December 31, 2011
		(In thousands)
Loans on real estate:
	Residential and Commercial	$	737,537			$	725,498			$	712,368
	Construction		72,842				53,172				44,087
	Equity lines of credit		45,308				44,131				44,601
Commercial loans			237,199				226,205				223,479
Agricultural loans			9,417				10,634				11,527
Installment loans to individuals			17,787				19,481				22,937
SBA			37,207				39,043				37,876
Other			3,043				2,521				3,092
Gross loans			1,160,340				1,120,685				1,099,967
Unearned discount			(1,591	)			(1,717	)			(1,827	)
Loans, net of unearned discount		$	1,158,749			$	1,118,968			$	1,098,140

For the year ending December 31, 2012, loans, net of unearned discount, grew $60.6 million, despite a $71.5 million reduction in our purchased loan participations. The increase in loans is due to a $28.8 million increase in construction loans, a $25.2 million increase in residential and commercial real estate and a $13.7 million increase in commercial loans. These increases were partially offset by declines in consumer loans of $5.2 million and agricultural loans of $2.1 million. The growth in construction loans was primarily due to construction of multi-tenant retail and long-term care facilities with full lease commitments. Residential and commercial real estate growth was primarily due to commercial real estate loans for multi-tenant retail or industrial-flex office buildings that are either owner-occupied or substantially leased. Excluding reductions in our energy portfolio of $30.7 million, our commercial loans grew $45.1 million during 2012, or 27.6%. At December 31, 2012, the overall loan portfolio included 29.9% owner-occupied properties; 18.2% retail and industrial properties; 10.7% office properties; 8.9% other commercial real estate properties; and 5.4% multi-family properties. The Bank has capacity to extend additional credit on residential and commercial real estate loans pursuant to the Bank's concentration ratios discussed below.

Since December 31, 2011, the ratio of construction, land and land development loans to capital increased by five percentage points to 57% at December 31, 2012. During the same period, the ratio of commercial real estate loans to capital increased by 24 percentage points to 278%. These concentration ratios remain below the regulatory commercial real estate concentration guidelines of 100% for land and construction loans and 300% for all investor real estate loans.

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

	December 31, 2012			September 30, 2012			December 31, 2011
	(In thousands)
Noninterest-bearing deposits	$	564,215		$	514,912		$	450,451
Interest-bearing demand and NOW		285,679			286,888			289,987
Money market		312,724			290,520			277,997
Savings		100,704			99,654			91,260
Time		191,434			203,122			204,091
Total deposits	$	1,454,756		$	1,395,096		$	1,313,786

Non-maturing deposits increased $71.3 million, or 6.0%, in the fourth quarter 2012 as compared to the third quarter 2012 and $153.6 million, or 13.8%, as compared to fourth quarter 2011. The growth in non-maturing deposits in 2012 included approximately $50.0 million in balances from five customers. We expect these funds will be withdrawn during the first and second quarters of 2013. Time deposits decreased $11.7 million as of December 31, 2012 as compared to September 30, 2012 and $12.7 million as compared to December 31, 2011. At December 31, 2012, noninterest-bearing deposits as a percentage of total deposits increased to 38.8% as compared to 36.9% at September 30, 2012 and 34.3% at December 31, 2011.

Securities sold under agreements to repurchase decreased $16.7 million from September 30, 2012 and increased $50.4 million from December 31, 2011 to $67.0 million at December 31, 2012. The increase from prior year was primarily related to a single depositor whose balance is expected to be re-deployed into the depositor's operations during the first quarter in 2013.

Total borrowings were $110.2 million at December 31, 2012, September 30, 2012 and December 31, 2011. The entire balance of borrowings at each balance sheet date 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:

		Ratio at December 31, 2012		Ratio at December 31, 2011		Minimum Capital  Requirement		Minimum  Requirement for "Well  Capitalized"  Institution
Total Risk-Based Capital Ratio:
	Consolidated	16.27	%	16.33	%	8.00	%	N/A
	Guaranty Bank and Trust Company	15.52	%	15.59	%	8.00	%	10.00	%
Tier 1 Risk-Based Capital Ratio:
	Consolidated	15.02	%	15.06	%	4.00	%	N/A
	Guaranty Bank and Trust Company	14.26	%	14.32	%	4.00	%	6.00	%
Leverage Ratio:
	Consolidated	11.93	%	12.12	%	4.00	%	N/A
	Guaranty Bank and Trust Company	11.35	%	11.53	%	4.00	%	5.00	%

Generally, the allowance for loan losses is included in total capital for regulatory purposes; however, it is limited to 1.25% of total risk-weighted assets. At December 31, 2012, approximately $7.0 million of the Bank's allowance for loan losses was disallowed from being included in total risk-based capital under the regulatory capital rules, or approximately 0.48% of the Company's consolidated risk-weighted assets.

As previously announced, the Company has submitted redemption notices to the trustee with respect to all of its $10.0 million CenBank I 10.6% and $5.0 million CenBank II 10.2% trust preferred securities. The trust preferred securities will be redeemed at a price equal to 104.24% (CenBank I) and 104.08% (CenBank II) of the liquidation amount of $1,000 per trust preferred security, respectively, plus all accrued and unpaid distributions to the respective redemption dates. The redemption of the trust preferred securities will be funded by a dividend from the Bank. The Company expects to redeem these securities during the first quarter 2013. As a result of the redemption, our consolidated total risk-based capital ratio and our Tier 1 risk-based capital ratio will decline by approximately one percentage point and our leverage ratio will decline by approximately 0.8 percentage points. All three ratios will 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 31, 2012 Pro Forma (1)				December 31, 2012				September 30, 2012				June 30, 2012				March 31, 2012				December 31, 2011
		(Dollars in thousands)
Nonaccrual loans and leases		$	13,692			$	13,692			$	21,185			$	21,291			$	29,648			$	26,801
Other nonperforming loans			224				224				543				-				1,301				6
Total nonperforming loans (NPLs)		$	13,916			$	13,916			$	21,728			$	21,291			$	30,949			$	26,807
Other real estate owned and foreclosed assets			8,730				19,580				23,532				24,640				28,072				29,027
Total nonperforming assets (NPAs)		$	22,646			$	33,496			$	45,260			$	45,931			$	59,021			$	55,834
Accruing loans past due 90 days or more (2)		$	224			$	224			$	543			$	-			$	1,301			$	6
Accruing loans past due 30-89 days (2)		$	4,270			$	4,270			$	7,678			$	18,448			$	10,798			$	10,805
Allowance for loan losses		$	25,142			$	25,142			$	28,597			$	29,307			$	30,075			$	34,661
Selected ratios:
NPLs to loans, net of unearned discount			1.20	%			1.20	%			1.94	%			1.92	%			2.79	%			2.44	%
NPAs to total assets			1.20	%			1.78	%			2.47	%			2.62	%			3.44	%			3.30	%
Allowance for loan losses to NPAs			111.02	%			75.06	%			63.18	%			63.81	%			50.96	%			62.08	%
Allowance for loan losses to NPLs			180.67	%			180.67	%			131.61	%			137.65	%			97.17	%			129.30	%
Allowance for loan losses to loans			2.17	%			2.17	%			2.56	%			2.64	%			2.71	%			3.16	%
Loans 30-89 days past due to loans, net of unearned discount			0.37	%			0.37	%			0.69	%			1.66	%			0.97	%			0.98	%
Texas ratio (3)			9.72	%			14.37	%			19.49	%			19.92	%			25.93	%			24.55	%
Classified asset ratio (4)			20.50	%			25.16	%			32.10	%			33.79	%			35.64	%			36.62	%

(1)		December 31, 2012 Pro Forma represents data subsequent to the sale of our largest OREO property in January 2013.
(2)		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.
(3)		Texas ratio defined as total NPAs divided by subsidiary bank only Tier 1 Capital plus allowance for loan losses.
(4)		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:

December 31, 2012		30-89 Days Past Due			90 days +Past Due and Still Accruing			Non-Accrual Loans			Total Past Due			Total Loans
		(In thousands)
Commercial and residential real estate		$	832		$	224		$	8,034		$	9,090		$	736,524
Construction loans			-			-			-			-			72,742
Commercial loans			2,671			-			3,005			5,676			236,874
Consumer loans			140			-			1,332			1,472			64,307
Other			627			-			1,321			1,948			48,302
Total		$	4,270		$	224		$	13,692		$	18,186		$	1,158,749
September 30, 2012		30-89 Days Past Due			90 days +Past Due and Still Accruing			Non-Accrual Loans			Total Past Due			Total Loans
		(In thousands)
Commercial and residential real estate		$	6,280		$	543		$	15,056		$	21,879		$	724,388
Construction loans			-			-			-			-			53,091
Commercial loans			753			-			3,217			3,970			225,858
Consumer loans			612			-			1,541			2,153			63,749
Other			33			-			1,371			1,404			51,882
Total		$	7,678		$	543		$	21,185		$	29,406		$	1,118,968

During the fourth quarter 2012, nonaccrual loans declined $7.5 million as compared to third quarter 2012, primarily due to the payoff of the largest single nonaccrual loan. In addition, classified loans declined $11.7 million and loans classified as special mention and watch loans declined by $14.5 million. OREO decreased by $4.0 million during the fourth quarter 2012 as compared to the third quarter 2012, primarily driven by the $3.0 million write down on the Company's single largest OREO property, which was subsequently sold in January 2013.

At December 31, 2012, classified assets as a percentage of capital and allowance for loan losses were 25.2%, a favorable decline from 32.1% at September 30, 2012 and 36.6% at December 31, 2011. 

Net charge-offs in the fourth quarter 2012 were negligible as compared to $0.7 million in the third quarter 2012 and $2.2 million in the fourth quarter 2011.

The general component of the allowance for loan losses decreased from $24.8 million at September 30, 2012 to $22.5 million at December 31, 2012. The general component represented 1.9% of loans, net of unearned discount, at December 31, 2012 as compared to 2.2% of loans, net of unearned discount, at the end of the previous quarter. The coverage ratio, defined as allowance for loan losses divided by nonperforming loans, increased from 131.6% at September 30, 2012 to 180.7% at December 31, 2012.

The Company recorded a $3.5 million negative provision for loan losses in the fourth quarter 2012, as compared to no provision in the third quarter 2012 and $1.0 million in the fourth quarter 2011. The decrease in provision for loan losses over the last year reflects an overall improvement in asset quality and the declines in net historical charge-offs.

Shares Outstanding

As of December 31, 2012, the Company had 105,847,607 shares of common stock outstanding, consisting of 100,752,607 shares of voting common stock and 5,095,000 shares of non-voting common stock. At December 31, 2012, total common shares outstanding include 1,696,796 shares of unvested stock awards.

Non-GAAP Financial Measures

This press release includes non-GAAP financial measures related to tangible assets, including tangible book value and the tangible equity ratio, all of which exclude intangible assets.

The Company discloses these non-GAAP financial measures to provide meaningful supplemental information regarding the Company's operational performance and to enhance investors' overall understanding of the Company's core financial performance. Management believes that these non-GAAP financial measures allow for additional transparency and are used by some investors, analysts and other users of the Company's financial information as performance measures. These non-GAAP financial measures are presented for supplemental informational purposes only 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 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:

		December 31, 2012			September 30, 2012			December 31, 2011
		(Dollars in thousands, except per share amounts)
Tangible Book Value per Common Share
	Total stockholders' equity	$	188,200		$	185,073		$	171,011
	Less: Intangible assets		(9,348	)		(10,161	)		(9,963	)
	Tangible common equity	$	178,852		$	174,912		$	161,048
	Number of common shares outstanding		105,847,607			106,256,654			105,436,623
	Book value per common share	$	1.78		$	1.74		$	1.62
	Tangible book value per common share	$	1.69		$	1.65		$	1.53
Tangible Common Equity Ratio
		December 31, 2012			September 30, 2012			December 31, 2011
		(Dollars in thousands, except per share amounts)
	Total stockholders' equity	$	188,200		$	185,073		$	171,011
	Less: Intangible assets		(9,348	)		(10,161	)		(9,963	)
	Tangible common equity	$	178,852		$	174,912		$	161,048
	Total assets	$	1,886,938		$	1,834,978		$	1,689,668
	Less: Intangible assets		(9,348	)		(10,161	)		(9,963	)
	Tangible assets	$	1,877,590		$	1,824,817		$	1,679,705
	Equity ratio - GAAP (total stockholders' equity / total assets)		9.97	%		10.09	%		10.12	%
	Tangible common equity ratio (tangible common equity / tangible assets)		9.53	%		9.59	%		9.59	%

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 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
					December 31, 2012				September 30, 2012				December 31, 2011
					(In thousands)
Assets
Cash and due from banks					$	121,217			$	127,823			$	109,225
Time deposits with banks						50,000				40,000				-
Securities available for sale, at fair value						413,382				395,632				353,152
Securities held to maturity						31,283				26,286				18,424
Bank stocks, at cost						14,262				14,468				14,565
		Total investments				458,927				436,386				386,141
Loans, net of unearned discount						1,158,749				1,118,968				1,098,140
	Less allowance for loan losses					(25,142	)			(28,597	)			(34,661	)
		Net loans				1,133,607				1,090,371				1,063,479
Premises and equipment, net						46,918				47,083				53,851
Other real estate owned and foreclosed assets, net						19,580				23,532				29,027
Other intangible assets, net						9,348				10,161				9,963
Securities sold, not yet settled						5,878				15,628				-
Other assets						41,463				43,994				37,982
		Total assets			$	1,886,938			$	1,834,978			$	1,689,668
Liabilities and Stockholders' Equity
Liabilities:
	Deposits:
		Noninterest-bearing demand			$	564,215			$	514,912			$	450,451
		Interest-bearing demand and NOW				285,679				286,888				289,987
		Money market				312,724				290,520				277,997
		Savings				100,704				99,654				91,260
		Time				191,434				203,122				204,091
			Total deposits			1,454,756				1,395,096				1,313,786
Securities sold under agreements to repurchase and federal funds purchased						67,040				83,734				16,617
Borrowings						110,163				110,166				110,177
Subordinated debentures						41,239				41,239				41,239
Securities purchased, not yet settled						16,943				12,311				20,800
Interest payable and other liabilities						8,597				7,359				16,038
Total liabilities						1,698,738				1,649,905				1,518,657
Stockholders' equity:
	Common stock and additional paid-in capital-common stock					705,389				705,238				704,698
	Accumulated deficit					(417,957	)			(421,077	)			(433,016	)
	Accumulated other comprehensive income					3,165				3,277				1,683
	Treasury stock					(102,397	)			(102,365	)			(102,354	)
			Total stockholders' equity			188,200				185,073				171,011
			Total liabilities and stockholders' equity		$	1,886,938			$	1,834,978			$	1,689,668

GUARANTY BANCORP AND SUBSIDIARIES
Unaudited Consolidated Statements of Operations
				Quarter Ended December 31,							Year Ended December 31,
				2012				2011			2012				2011
				(Dollars in thousands, except share and per share data)
Interest income:
	Loans, including fees			$	14,303			$	14,552		$	57,326			$	59,985
	Investment securities:
		Taxable			2,127				2,441			8,746				11,277
		Tax-exempt			691				582			2,558				2,066
	Dividends				156				158			631				653
	Federal funds sold and other				99				71			304				332
		Total interest income			17,376				17,804			69,565				74,313
Interest expense:
	Deposits				693				878			2,878				6,746
	Securities sold under agreement to repurchase and federal funds purchased				22				14			67				74
	Borrowings				836				836			3,327				4,727
	Subordinated debentures				608				751			2,882				2,872
		Total interest expense			2,159				2,479			9,154				14,419
		Net interest income			15,217				15,325			60,411				59,894
Provision (credit) for loan losses					(3,500	)			1,000			(2,000	)			5,000
		Net interest income, after provision for loan losses			18,717				14,325			62,411				54,894
Noninterest income:
	Customer service and other fees				2,640				2,320			9,909				9,413
	Gain on sale of securities				817				283			2,527				3,703
	Gain on sale of SBA loans				-				-			203				-
	Other				309				197			952				829
		Total noninterest income			3,766				2,800			13,591				13,945
Noninterest expense:
	Salaries and employee benefits				6,832				6,716			26,769				26,059
	Occupancy expense				1,550				1,967			7,253				7,513
	Furniture and equipment				760				846			3,143				3,508
	Amortization of intangible assets				812				1,017			3,138				4,091
	Other real estate owned, net				3,209				240			4,370				1,559
	Insurance and assessments				677				845			3,137				4,053
	Professional fees				1,543				690			4,089				3,528
	Prepayment penalty on long term debt				-				-			-				2,672
	Impairment of long-lived assets				-				-			2,750				-
	Other general and administrative				2,539				2,528			9,465				9,504
		Total noninterest expense			17,922				14,849			64,114				62,487
		Income before income taxes			4,561				2,276			11,888				6,352
Income tax expense (benefit)					1,441				-			(3,171	)			-
		Net Income		$	3,120			$	2,276		$	15,059			$	6,352
Net income (loss) applicable to common stockholders				$	3,120			$	2,276		$	15,059			$	(13,454	)
Earnings (loss) per common share-basic:				$	0.03			$	0.02		$	0.14			$	(0.21	)
Earnings (loss) per common share-diluted:					0.03				0.02			0.14				(0.21	)
Weighted average common shares outstanding-basic					103,988,407				103,840,990			103,934,009				64,941,731
Weighted average common shares outstanding-diluted					104,337,595				104,060,096			104,391,256				64,941,731

GUARANTY BANCORP AND SUBSIDIARIES
Unaudited Consolidated Average Balance Sheets
			QTD Average									YTD Average
			December 31, 2012			September 30, 2012			December 31, 2011			December 31, 2012			December 31, 2011
			(In thousands)
Assets
Interest earning assets
	Loans, net of unearned discount		$	1,129,893		$	1,096,395		$	1,085,975		$	1,110,267		$	1,123,619
	Securities			451,342			403,053			364,833			405,240			394,456
	Other earning assets			159,038			170,852			124,385			129,391			140,608
Average earning assets				1,740,273			1,670,300			1,575,193			1,644,898			1,658,683
Other assets				102,939			106,257			106,975			104,217			110,249
Total average assets			$	1,843,212		$	1,776,557		$	1,682,168		$	1,749,115		$	1,768,932
Liabilities and Stockholders' Equity
Average liabilities:
Average deposits:
	Noninterest-bearing deposits		$	521,000		$	515,157		$	459,031		$	496,940		$	425,763
	Interest-bearing deposits			895,729			861,685			869,758			867,259			953,727
	Average deposits			1,416,729			1,376,842			1,328,789			1,364,199			1,379,490
Other interest-bearing liabilities				232,004			208,643			173,848			197,633			215,093
Other liabilities				8,736			8,739			9,691			7,983			8,548
Total average liabilities				1,657,469			1,594,224			1,512,328			1,569,815			1,603,131
Average stockholders' equity				185,743			182,333			169,840			179,300			165,801
Total average liabilities and stockholders' equity			$	1,843,212		$	1,776,557		$	1,682,168		$	1,749,115		$	1,768,932

GUARANTY BANCORP Unaudited Credit Quality Measures
			Quarter Ended
			December 31, 2012				September 30, 2012				June 30, 2012				March 31, 2012				December 31, 2011
			(Dollars in thousands)
Nonaccrual loans and leases			$	13,692			$	21,185			$	21,291			$	29,648			$	26,801
Other nonperforming loans				224				543				-				1,301				6
	Total nonperforming loans		$	13,916			$	21,728			$	21,291			$	30,949			$	26,807
Other real estate owned and foreclosed assets				19,580				23,532				24,640				28,072				29,027
	Total nonperforming assets		$	33,496			$	45,260			$	45,931			$	59,021			$	55,834
Total classified assets			$	58,635			$	74,514			$	77,910			$	81,130			$	83,317
Nonperforming loans			$	13,916			$	21,728			$	21,291			$	30,949			$	26,807
Other restructured loans still accruing				3,838				-				-				-				-
Allocated allowance for loan losses				(2654	)			(3,774	)			(1,859	)			(2,572	)			(3,490	)
	Net investment in impaired loans		$	15,100			$	17,954			$	19,432			$	28,377			$	23,317
Accruing loans past due 90 days or more			$	224			$	543			$	-			$	1,301			$	6
Accruing loans past due 30-89 days			$	4,270			$	7,678			$	18,448			$	10,798			$	10,805
Charged-off loans			$	1,199			$	1,067			$	2,062			$	6,371			$	2,603
Recoveries				(1,244	)			(357	)			(794	)			(785	)			(412	)
	Net charge-offs		$	(45	)		$	710			$	1,268			$	5,586			$	2,191
Provision for loan losses			$	(3,500	)		$	-			$	500			$	1,000			$	1,000
Allowance for loan losses			$	25,142			$	28,597			$	29,307			$	30,075			$	34,661
Allowance for loan losses to loans, net of unearned discount				2.17	%			2.56	%			2.64	%			2.71	%			3.16	%
Allowance for loan losses to nonaccrual loans				183.63	%			134.99	%			137.65	%			101.44	%			129.33	%
Allowance for loan losses to nonperforming assets				75.06	%			63.18	%			63.81	%			50.96	%			62.08	%
Allowance for loan losses to nonperforming loans				180.67	%			131.61	%			137.65	%			97.17	%			129.30	%
Nonperforming assets to loans, net of unearned discount, and other real estate owned				2.84	%			3.96	%			4.05	%			5.19	%			4.95	%
Nonperforming assets to total assets				1.78	%			2.47	%			2.62	%			3.44	%			3.30	%
Nonaccrual loans to loans, net of unearned discount				1.18	%			1.89	%			1.92	%			2.67	%			2.44	%
Nonperforming loans to loans, net of unearned discount				1.20	%			1.94	%			1.92	%			2.79	%			2.44	%
Annualized net charge-offs to average loans				(0.02	)%			0.26	%			0.46	%			2.03	%			0.80	%