From the Vault: Local banks' 1Q results

Earnings per diluted share were 23 cents, down from 62 cents per share in first-quarter 2007. Net income was $617,000, compared to $1.75 million last year.

Guaranty’s net interest margin took a hit after the Federal Reserve’s interest rate cuts during the quarter, a major factor in the company’s earnings decline, according to the quarterly release. Other factors included a $610,000 increase in its provision for loan losses, a 28 percent drop in noninterest income due to Guaranty’s decision not to sell Freddie Mac shares because of the national real estate crisis, and an 8 percent increase in noninterest expense from hiring new personnel.

“We have mixed feelings about our first-quarter performance,” Guaranty President and CEO Shaun Burke said in the release. “Obviously, we are disappointed with the decline in earnings. On a positive note, our recent investments in human capital, technology and facilities continue to gain momentum in creating long-term shareholder value.”

Total assets increased 12 percent, or $65.7 million, since the end of 2007; net loans increased 3 percent; investments increased 255 percent; and deposits increased 3 percent.

Guaranty is the holding company for Springfield-based Guaranty Bank, which has eight branches in Greene and Christian counties and loan production offices in Wright, Webster and Howell counties.

Shares (Nasdaq: GFED) closed April 30 at $23.78, compared to a 52-week range of $23.13 to $30.85.

U.S. Bancorp quarterly net income dips

U.S. Bancorp on April 15 reported first-quarter net income of $1.09 billion, down 3.5 percent from the same quarter a year ago.

Diluted earnings per share were 62 cents, 1.6 percent lower than first-quarter 2007, according to the Minneapolis-based bank’s report.

Net interest income was $1.8 billion, up from $1.67 billion a year earlier, and noninterest income was $2.04 billion, compared to $1.72 billion a year ago.

Return on average assets was 1.85 percent, compared to 2.09 percent last year. Average loans for the quarter were 7.3 percent higher than first-quarter 2007.

The company’s results included a $492 million gain related to the Visa Inc. initial public offering in March, $253 million in impairment charges on structured investment securities purchased in last year’s fourth quarter, and an incremental provision for $192 million in credit losses due to stresses in the residential real estate market and related industries, according to the report.

Shares (NYSE: USB) closed April 30 at $33.89, compared to a 52-week range of $27.86 to $35.08.

Regions posts 1% quarterly earnings increase

Birmingham, Ala.-based Regions Financial Corp. recorded a 1 percent increase in earnings in the first quarter, according to its April 15 quarterly report.

The bank’s net income increased to $336.7 million, or 48 cents per diluted share, from $333 million, or 45 cents per diluted share, in first-quarter 2007.

Net interest income fell 12.7 percent to $1.03 billion for the quarter, while noninterest income increased 30.3 percent to $908.3 million.

The financial corporation posted first-quarter gains of $91.2 million from the initial public offering of Visa, through the sale of the bank’s common stock, as well as $91.6 million in gains from investment securities sales.

Shares (NYSE: RF) closed April 30 at $21.92, compared to a 52-week range of $17.90 to $36.66.

Bank of America 1Q net income plummets

Bank of America Corp. net income tumbled 77 percent in the first quarter.

In its April 21 earnings release, the Charlotte, N.C.-based bank reported net income of $1.21 billion for the year’s first quarter, down from $5.26 billion in first-quarter 2007. Diluted earnings per share sank 80 percent to 23 cents, compared to $1.16 earned a year ago.

“The weakness in the economy and prolonged disruptions in the capital markets took their toll on our performance,” CEO and Chairman Kenneth D. Lewis said in a news release.

“That said, we are continuing to invest in growth initiatives across the company, and believe our core strengths – including our diverse income stream, liquidity and capital – put us in a strong position to withstand the jolts to the system and emerge even stronger when conditions improve,” he added.

Primary factors in the bank’s earnings decline were a $4.78 billion increase in provision expense because of rising credit costs in the home equity, small business and homebuilder portfolios, and $1.31 billion in trading-related losses driven by write-downs of collateralized debt obligations and leveraged loans, according to the release.

Net interest income rose 20 percent to $10.29 billion, though that was partially offset by higher funding costs. Noninterest income was down 29 percent to $7.01 billion.

Noninterest expense was relatively flat, increasing less than a percent to $9.03 billion.

Shares (NYSE: BAC) closed April 30 at $37.54, compared to a 52-week range of $33.12 to $52.96.[[In-content Ad]]