Slide 1: First Quarter 2008 Financial Highlights
First Quarter 2008 Financial Highlights April 29, 2008
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains "forward-looking statements" within the meaning of the federal securities laws. These forward-looking statements are identified by their use of terms and phrases such as "believe," "anticipate," "could," "estimate," "likely," "intend," "may," "pl
Slide 3: Earnings Highlights
($ in millions, except per share data) 1Q08 4Q07 1Q07 Net Interest Income before LLP $98 $102 $95 (Provision) Credit for Credit Losses (58) (33) 2 Net Interest Income After Provision 40 69 97 Non-Interest Income 42 38 39 Non-Interest Expense (99) (95) (93) (Loss) Income Before Taxes (17) 12 43 Incom
Slide 4: Net Interest Margin
Net Interest Margin Despite volatility in interest rates, successfully maintained stable net interest margin long-term 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 1Q 08 Guaranty Net Interest Margin 0.0234 0.0251 0.0263 0.0275 0.0238 0.0237 0.0255 0.0258 0.0258 0.0259 0.0249 Average Fed Funds 0
Slide 5: Balance Sheet Highlights
($ in billions, except per share data) 1Q08 4Q07 1Q07 Total Assets $16.4 $16.8 $15.8 Loans, net of allowance 10.1 9.9 9.6 Securities - amortized cost 5.3 5.5 5.1 Net Unrealized Losses on Avail-for-Sale Securities (0.4) - - Total Liabilities 15.5 15.7 14.7 Deposits 9.2 9.4 9.5 FHLB Borrowings 5.7 5.7
Slide 6: Diversified deposit base with no brokered deposits
Diversified deposit base with no brokered deposits Deposit Mix Deposits MMDA Checking CDs 0.31 0.2 0.49 Total: $9.2 billion as of 3/31/2008
Slide 7: Deposits CD Maturities
Deposits CD Maturities A disproportionately large number of CDs matured in February and March 2008. CDs matured during period: $1.7 billion Renewed: $1.4 billion Avg APY of CDs before maturity: 4.98% After renewal: 3.19% No. of customers involved: 43,968 Retained: 41,469* Total deposit relationship:
Slide 8: Distinctive Customer Service
Guaranty Bank Wachovia Industry Chase B of A Citigroup Wells Fargo 84 79 78 74 72 69 69 Distinctive Customer Service We provide a level of service unmatched by other banks *In the fourth quarter of 2007, Guaranty Bank engaged ACSI in the same methodology as the independent research of the largest U.
Slide 9: Loan Portfolio
Loan Portfolio March 31, 2008 Diversified loan portfolio Overview $10 billion total Strong middle market focus Strong energy lending with focus on E&P Significant commercial real estate experience Lower risk single family mortgage portfolio Energy Lending Multifamily and Senior Housing Single Family
Slide 10: Commercial Loan Balances
2004* 2005* 2006 3/31/2007 2007 3/31/2008 Single-Family Construction (homebuilders) 1.303 1.665 1.782 1.768 1.51 1.341 Multifamily and Senior Housing 1.454 1.469 1.27 1.243 1.541 1.752 Commercial Real Estate 0.709 0.758 1.227 1.356 1.674 1.8 Single-Family Mrtg Warehouse 0.58 0.757 0.795 0.688 0.695
Slide 11: Charge-off History
Charge-off History Average charge-off rate (2004 thru 1Q08): Guaranty = .09% Peers* = .23% $10-50bn BHCs and THCs** = .22% Net charge-offs lower than our peers 2004 2005 2006 1Q08*** Guaranty 0.0007 0.0021 0.001 -0.0003 0.0008 Peer average* 0.0023 0.002 0.0019 0.0023 0.0043 $10-50bn BHCs and THCs av
Slide 12: Non Performing Loans
12/31/2004 12/31/2005 12/31/2006 12/31/2007 3/31/2008 Guaranty 0.0051 0.0035 0.0027 0.0165 0.0254 Peer average* 0.0043 0.0039 0.0038 0.0063 0.0093 $10-50bn BHCs and THCs average** 0.005 0.0045 0.0053 0.0123 0.0147 Non Performing Loans Non Performing loans as a percentage of total loans Recent increa
Slide 13: Nonperforming Assets by Type
Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Residential Mortgage 22.993 23.029 30 40 69 Other 13 13.08 12 22 33 Homebuilder (Private) 88 117 182 Nonperforming Assets by Type Homebuilder Other Residential Mortgage $284 88 Regional homebuilder loans driving increase in NPAs ($ in millions) 88
Slide 14: Allowance for Loan Losses by Category
Allowance for Loan Losses by Category ($ in millions) 1Q 2008 1Q 2008 2007 2007 2006 2006 Allowance Allowance as a % of Loan Category Allowance Allowance as a % of Loan Category Allowance Allowance as a % of Loan Category Single-family mortgage $12 0.76% $9 0.54% $7 0.30% Single-family mortgage ware
Slide 15: Homebuilder Portfolios
Homebuilder Portfolios Sep-07 Dec-07 Mar-08 National 0.3 0.2 0.1 Regional 1.5 1.3 1.2 Regional builders National builders Outstanding balance
Slide 16: Regional Homebuilder Loans
Regional Homebuilder Loans As of March 31, 2008 ($ in millions) Houses Land/Lots & Other Total % of Total Northern & Central California $72 $155 $227* 19% Other California 80 142 222 19% Texas 95 26 121 10% Florida 58 63 121 10% Colorado 48 34 82 7% Arizona 21 41 62 5% Other 118 232 350 30% 492 693
Slide 17: Single-Family Mortgages Detail
Pre-2004 2004 2005 2006 2007 1 Q 2008 Intermediate ARMs 275 290 38 8 22 10 Pay Option ARMs 52 78 284 14 26 7 Other 1st Liens 241 65 13 12 12 0 Seconds 128 7 7 7 7 0 $1 Single-Family Mortgages Detail Vintage of Origination $ in millions March 2008 March 2008 March 2008 March 2008 March 2008 March 200
Slide 18: MBS Portfolio Overview
MBS Portfolio Overview Amortized Cost ($ in billions) Held to Maturity Available for Sale Total % of Total Agency $1.1 $0.5 $1.6 31% Non-agency 2.3 1.4 3.7 69% Total 3.4 1.9 5.3 100% % of Total 64% 36% 100%
Slide 19: Mortgage Backed Securities Product Type
Non-agency MBS Product Type Non-agency MBS by State Mortgage Backed Securities Product Type <=2004 2005 2006 2007 MBS 0.05 0.39 0.16 0.4 Unpaid Principal Balance ($ in billions) % of Total Traditional Option Arms $3.0 82% Hybrid Option Arm 0.5 13% Hybrid Arm 0.2 5% TOTAL $3.7 100% California 59% Flo
Slide 20: MBS Portfolio Detail
As of March 31, 2008 ($ Billions) Amortized Cost Fair Value Available for Sale: Agency $0.55 $0.55 Non-agency $1.36 $0.94 Held to Maturity: Agency $1.09 $1.09 Non-agency $2.35 $1.70 Total: $5.35 $4.28 Non-agency MBS Adjustable rate All AAA rated Underlying collateral delinquency rate: 15.6% Weighted
Slide 21: MBS Subordination
MBS Subordination At Issue 3/31/2008 East 0.107 0.155 Significant and growing subordination levels provide protection from credit losses
Slide 22: Mortgage Backed Securities Fair Values
Mortgage Backed Securities Fair Values Source of Fair Values Agency MBS Fair values provided by vendor sources Non-agency MBS Obtain bids on eight benchmark bonds (out of 45 issuances) from several Wall Street dealers and market participants. Utilize median bid for each benchmark security to determi
Slide 23: Mortgage Backed Securities Market
Mortgage Backed Securities Market EXAMPLE EXAMPLE Issue: CWALT 05-76 A2 Balance owned ($mm) $127 Guaranty's basis 102% Market bid @ 3/31 60% Subordination @ 3/31 17% Credit perspective Investor should expect to receive full principal (paying 60 cents for each dollar of principal received) and stated
Slide 24: Operating Efficiency
Operating Efficiency 1Q08 2007 2006 2005 Compensation and benefits $51 $181 $184 $182 Occupancy 8 28 28 27 Information systems and technology 5 14 14 16 Charges related to asset impairments and severance -- -- 11 5 Other 35 149 151 154 99 372 388 384 Efficiency ratio 71% 68% 67% 67% Noninterest Expe
Slide 25: Cost Cutting Initiatives
Cost Cutting Initiatives Effort initiated in first quarter 2008 to analyze and implement substantial cost reductions. 135 jobs cut in April 2008 Total annualized expense cut: $10 million Additional initiatives: Limiting new hires, including not filling open positions Reducing travel expenditures and
Slide 26: Capital
Capital Guaranty as of March 31, 2008 TCE/TA *Peers: ASBC, BOH, BOKF, BXS, CBSH, CFR, CNB, CYN, FCNCA, FMER, FULT, IBOC, STSA, SUSQ, TCB, TSFG, VLY, WBS, and WTNY. Peers* as of December 31, 2007 (insufficient 3/31/08 peer data available). OTS Well Capitalized Standard Total Risk-Based Capital Tier 1