DENVER, CO--(Marketwired - Apr 17, 2013) - Guaranty Bancorp (
- Net loan growth in the first quarter 2013 of 7.7% annualized
- Wealth management group grew assets under management in the first quarter 2013 by 18.4%
- Net interest margin improvement of 13 basis points to 3.61%, as compared to prior quarter
- Redemption of $15.0 million of our high-cost, fixed rate trust preferred securities
Guaranty Bancorp (
First quarter 2013 pre-tax operating earnings1 were $4.1 million compared to pre-tax operating earnings of $3.6 million in the same quarter last year. The increase in pre-tax operating earnings of $0.5 million was primarily due to an increase in noninterest income, mostly related to a $0.4 million improvement in investment advisory services income. First quarter 2013 GAAP net income declined $0.8 million as compared to the fourth quarter 2012 GAAP net income of $3.1 million, whereas first quarter 2013 pre-tax operating earnings increased $0.6 million to $4.1 million as compared to the prior linked quarter of $3.5 million. This increase in pre-tax earnings was primarily due to a decline in noninterest expense of $0.5 million combined with an increase in net interest income of $0.1 million due to a higher net interest income in the current quarter. The decline in noninterest expense was mostly due to a decline in professional fees, specifically legal expenses.
"We are pleased to report strong growth in loans and assets under management in the first quarter 2013," said Paul W. Taylor, President and CEO. "We have successfully expanded our wealth management group since the acquisition of Private Capital Management last year and continue to grow loans in our local markets. We are particularly pleased with our commercial loan growth of 4.1% during the quarter, or 16.6% annualized. In addition, the prepayment of $15 million of our fixed, high-cost trust preferred securities during the first quarter has helped mitigate the pressure on our margin due to the current interest rate environment."
(1) "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 | ||||||||||||
| March 31, 2013 | December 31, 2012 | March 31, 2012 | ||||||||||
| (Dollars in thousands, except per share amounts) | ||||||||||||
| Net income | $ | 2,272 | $ | 3,120 | $ | 2,917 | ||||||
| Earnings per common share | $ | 0.02 | $ | 0.03 | $ | 0.03 | ||||||
| Return on average assets | 0.51 | % | 0.67 | % | 0.70 | % | ||||||
| Net interest margin | 3.61 | % | 3.48 | % | 3.93 | % | ||||||
| Efficiency ratio (tax equivalent) | 73.65 | % | 88.16 | % | 73.07 | % | ||||||
Balance Sheet
| March 31, 2013 | December 31, 2012 | Percent Change | March 31, 2012 | Percent Change | ||||||||||||||
| (Dollars in thousands, except per share amounts) | ||||||||||||||||||
| Cash and cash equivalents | $ | 55,891 | $ | 163,217 | (65.8) | % | $ | 105,273 | (46.9) | % | ||||||||
| Time deposits with banks | 5,000 | 8,000 | (37.5) | % | - | - | ||||||||||||
| Total investments | 512,188 | 458,927 | 11.6 | % | 401,357 | 27.6 | % | |||||||||||
| Total loans, net of unearned discount | 1,180,607 | 1,158,749 | 1.9 | % | 1,109,897 | 6.4 | % | |||||||||||
| Allowance for loan losses | (24,060 | ) | (25,142 | ) | (4.3) | % | (30,075 | ) | (20.0) | % | ||||||||
| Total assets | 1,836,840 | 1,886,938 | (2.7) | % | 1,716,444 | 7.0 | % | |||||||||||
| Average earning assets, quarter-to-date | 1,728,385 | 1,740,273 | (0.7) | % | 1,564,913 | 10.4 | % | |||||||||||
| Average assets, quarter-to-date | 1,821,127 | 1,843,212 | (1.2) | % | 1,668,534 | 9.1 | % | |||||||||||
| Total deposits | 1,442,317 | 1,454,756 | (0.9) | % | 1,338,928 | 7.7 | % | |||||||||||
| Book value per common share | 1.77 | 1.78 | (0.6) | % | 1.64 | 7.9 | % | |||||||||||
| Tangible book value per common share | 1.69 | 1.69 | - | % | 1.56 | 8.3 | % | |||||||||||
| Equity ratio - GAAP | 10.32 | % | 9.97 | % | 3.5 | % | 10.15 | % | 1.7 | % | ||||||||
| Tangible common equity ratio | 9.90 | % | 9.53 | % | 3.9 | % | 9.67 | % | 2.4 | % | ||||||||
| Total risk-based capital ratio | 15.20 | % | 16.27 | % | (6.6) | % | 16.18 | % | (6.1) | % | ||||||||
Net Interest Income and Margin
| Three Months Ended | ||||||||||||
| March 31, 2013 | December 31, 2012 | March 31, 2012 | ||||||||||
| (Dollars in thousands) | ||||||||||||
| Net interest income | $ | 15,378 | $ | 15,217 | $ | 15,300 | ||||||
| Interest rate spread | 3.35 | % | 3.21 | % | 3.62 | % | ||||||
| Net interest margin | 3.61 | % | 3.48 | % | 3.93 | % | ||||||
| Net interest margin, fully tax equivalent | 3.72 | % | 3.57 | % | 4.03 | % | ||||||
| Average cost of deposits (including noninterest bearing deposits) | 0.18 | % | 0.19 | % | 0.24 | % | ||||||
Net interest income increased by $0.2 million to $15.4 million in the first quarter 2013 compared to the fourth quarter 2012, and increased by $0.1 million compared to the first quarter 2012. Net interest margin increased 13 basis points from 3.48% in the fourth quarter 2012 to 3.61% in the first quarter 2013 and declined 32 basis points from 3.93% in the first quarter 2012. The improvement in net interest margin as compared to the prior linked quarter was primarily due to a ten basis point increase in yield on earnings assets combined with a four basis point decline in the cost of interest bearing liabilities. The decline in net interest margin in the first quarter 2013 as compared to the same quarter in 2012 was related to a 48 basis point decline in the yield on earnings assets, partially offset by a 21 basis point decline in the cost of interest bearing liabilities.
The increase in net interest income in the first quarter 2013 as compared to the prior linked quarter was primarily due to a decrease in interest expense of $0.2 million mostly as a result of the prepayment of $15.0 million in fixed, high-cost trust preferred securities ("TruPS") and related subordinated debentures in the first quarter 2013 as well as a reduction in deposit interest expense due to lower average rates. The prepayment of these TruPS and related subordinated debentures will result in annualized savings of approximately $1.6 million. First quarter 2013 interest income remained stable as compared to the prior linked quarter while average loan and investment balances increased $34.5 million and $47.2 million, respectively.
The increase in net interest income as compared to the same quarter in 2012 was primarily due to a decrease in interest income of $0.3 million, offset by a reduction in interest expense of $0.4 million. The decline in interest income largely relates to a decline in loan yield of 37 basis points, partially offset by an increase in average loan balances of $59.7 million, or 5.40%. 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 accounts and a reduction in subordinated debentures interest due to the prepayment of this debt during the first quarter 2013 as well as the payment of compounding, deferred interest on all subordinated debentures during the third quarter 2012.
Noninterest Income
The following table presents noninterest income as of the dates indicated:
| Three Months Ended | ||||||||||
| March 31, 2013 | December 31, 2012 | March 31, 2012 | ||||||||
| (In thousands) | ||||||||||
| Noninterest income: | ||||||||||
| Customer service and other fees | $ | 2,620 | $ | 2,640 | $ | 2,271 | ||||
| Gain on sale of securities | - | 817 | 622 | |||||||
| Gain on sale of SBA loans | 136 | - | - | |||||||
| Other | 194 | 309 | 206 | |||||||
| Total noninterest income | $ | 2,950 | $ | 3,766 | $ | 3,099 | ||||
Excluding gain on sales of securities, noninterest income remained at a consistent level in the first quarter 2013 as compared to the fourth quarter 2012 and increased $0.5 mi
