Guaranty Bancorp in Denver to Redeem $15M in Debt

Guaranty Bancorp in Denver is planning to retire some of its high-cost debt.

The $1.8 billion-asset company said late Friday that it would redeem $15 million in trust-preferred securities in February and March. Guaranty said in a press release that it expects to save about $1.6 million annually from the redemption, which it would fund from cash reserves.

The move became possible after the Federal Reserve in May lifted a written agreement that barred the company from redeeming debt or taking other steps that would reduce capital. Regulators issued the agreement in January 2010 after the company lost $30.6 million in 2009 and roughly $257 million a year earlier.

"We are pleased to be redeeming these high-cost securities early for the favorable impact we expect on our net income, earnings per share, cost of funds, return on assets and return on equity," Paul Taylor, Guaranty's chief executive, said in the release.

Guaranty estimated that the redemption would lower its Tier 1 risk-based capital ratio by 107 basis points, to 14.13%. Its leverage ratio should decline by 81 basis points, to 11.35%.