This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

10 Community Bank M&A Targets, Revisited


10. Guaranty Bancorp

Shares of Guaranty Bancorp (GBNK) of Denver, Colo. closed at $1.16 Wednesday, down 18% year-to-date.

The company is one of three community bank targets named in January by FBR analyst Brett Scheiner, who cited credit problems, while adding that Guaranty Bancorp's market footprint in Denver could be attractive to buyers.

Guaranty will hold a special meeting of stockholders on Sept. 29, to vote on a transaction agreement with holders of the company's series A convertible preferred shares, to app51,902,000 shares, as part of an acceleration of the preferred to common shares. The majority of the preferred is held by a group of private equity funds. Two of the fund managers involved with the conversion have agreed with the Federal Reserve to limit their common stock holdings 14.9% of outstanding common shares and 9.9% of voting shares, respectively, meaning that some of the newly issued common shares are likely to be nonvoting shares.

Following the appointment of former CFO and chief operating offer Paul Taylor to president and CEO in May, Guaranty in late July promoted senior vice president and controller Christopher Treece to CFO.

Guaranty Bancorp had $1.7 billion in total assets as of June 30 and reported second-quarter operating net income of $1.4 million. After paying $1.5 million in dividends on preferred shares, the second-quarter net loss to common stockholders was $109 thousand. In comparison, the net loss to common stockholders in the second quarter of 2010 was $5.7 million, or 11 cents a share.

The earnings improvement reflected a decline in the provision for loan losses to $1 million during the second quarter, from $8.4 million a year earlier.

Nonperforming assets totaled $72.2 million, or 4.13% of total assets, as of June 30, improving from 5.38% a year earlier. The annualized ratio of net charge-offs to average loans was 3.24% during the second quarter, which Taylor said reflected a "planned reduction in problem loans." Loan loss reserves covered 3.56% of total loans as of June 30.

Taylor said that Guaranty Bancorp achieved its "highest quarter of new loan bookings in several years" during the second quarter, with "$71.4 million of new loans with over 40 different businesses during the quarter as well as extending $22.8 million of credit on existing loans," adding that the bank's "pipeline of potential new loans continues to grow."

According to SNL Financial, Guaranty Bancorp's shares are trading for 0.7 times tangible book value. The company's tangible common equity ratio was 4.95% as of June 30, according to SNL, increasing from 4.42% at the end of the previous quarter. The company's regulatory total risk-based capital was a strong 16.22% as of June 30, increasing from 15.82% the previous quarter.

Scheiner says that "with the management change at the top, the bank is likely to continue to try and make a go of it independently. Whether or not the longer term thought process would be to sell, they will be best served by generating some reasonable level of pre-credit earnings," adding that "they wouldn't get much selling here."

Both analysts Covering Guaranty Bancorp have neutral ratings on the shares.

2 of 11

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs