State and federal banking regulators have asked Guaranty Bancorp to submit plans within the next two months to better manage its credit risk, reduce its exposure to commercial real estate and deal with its bad loans.
Denver-based Guaranty, the holding company for Guaranty Bank & Trust Co., signed a written agreement with the Federal Reserve Bank of Kansas City and Colorado Division of Banking last Friday.
That agreement, made public Thursday, resulted from a bank examination conducted in May.
“The economy has taken its toll on all banks, and we aren’t immune from that,” said Paul Taylor, the bank’s chief financial and operating officer. “It is about filing some plans and ongoing monitoring.”
The bank can’t take in new brokered deposits, which regulators view as volatile because they tend to chase the highest interest rates, and can’t pay out dividends to investors without regulatory approval.
Guaranty, which reported earnings Thursday, said it is already addressing the concerns raised by regulators and remains well-capitalized after raising $57.8 million from investors.
After peaking in August, nonperforming loans have declined, including a 26.5 percent drop of $21.5 million between the third and fourth quarters, Taylor said.
Still, delinquent debt, while on the decline, has stressed the bank, with $25.8 million in residential construction and land development loans and $18.2 million in commercial loans not performing.
The bank at year’s end was holding $96.9 million in nonperforming assets, including $37.2 million in foreclosed property and other assets it reclaimed.
Larry Martin, a banking consultant with Banking Strategies LLC, described Guaranty’s agreement as pretty standard and “meek in some terms” compared with others he has seen.
Still, the agreement will force the bank to take a tougher line with delinquent borrowers in coming months, he said.
Shares of Guaranty rose 11 percent in trading Thursday to close at $1.41.
Aldo Svaldi: 303-954-1410 or asvaldi@denverpost.com
