Guaranty Federal loses $592K in first quarter
Tuesday, April 28, 2009 5:47 AM
Guaranty Federal Bancshares Inc. posted a first-quarter loss of $592,000 on increases in its loan-loss provision and nonperforming assets.
The Springfield-based holding company for Guaranty Bank had a per-share loss of 30 cents for the quarter, according to an April 22 earnings release. That's compared to first-quarter 2008, when the company reported a $617,000 profit, or 23 cents per share.
Guaranty increased its provision for loan losses by $160,000 from a year ago, and nonperforming assets jumped by $2.5 million. Meanwhile, the Federal Reserve's interest rate cuts continued to affect Guaranty's yield on loans, according to the release.
The bank also is dealing with a higher cost of funds in the near term because of its effort to grow deposits to increase liquidity; deposits climbed 19 percent during the quarter.
In January, Guaranty participated in the U.S. Treasury's Capital Purchase Program and sold the government 17,000 shares of preferred stock and a 10-year warrant to purchase common stock, in exchange for $17 million in cash.
Although Guaranty's campaign to grow deposits and its participation in the Capital Purchase Program "have a short-term impact on earnings, we are confident that they are prudent given the current environment," Guaranty President and CEO Shaun Burke said in the release. "We are well-positioned to benefit when the economy recovers and remain committed to serving our clients and communities and building a solid company for the future."
Noninterest expense increased 21 percent during the quarter, as Guaranty hired several associates in 2008, and as the Federal Deposit Insurance Corp. increased its assessment of Guaranty's insurance premiums by $212,031 for the quarter.
Shares (Nasdaq: GFED) closed Monday at $5.25, compared to a 52-week range of $3.29 to $24.44.