Guaranty Bank 4Q earnings down from 3Q, improved from '08

Fourth-quarter earnings at Guaranty Federal Bancshares (Nasdaq: GFED), the holding company for Guaranty Bank, were down from the third quarter, but the numbers are improved from a fourth-quarter 2008 loss.

For the quarter ending Dec. 31, 2009, the bank lost 37 cents per diluted common share after preferred stock dividends, compared to a gain of 11 cents per diluted share in the third quarter and a loss of $1.45 per share in 4Q 2008.

Losses for the year were $1.29 per share, compared to a loss of $2.06 per share last year.

The bank cited several factors for its numbers, including declining net interest margin due to an increase in nonperforming assets, and increased cost of funds due to successful deposit growth.

In its earnings release, the company pointed to several positive signs. The bank's provision for loan losses in the quarter was $1.9 million, down from $6.6 million in the same quarter of 2008, and Guaranty also made $329,000 on sales of fixed-rate loans in the quarter compared to $179,000 a year earlier. Losses from write-downs of foreclosed assets dropped to $457,000 compared to $663,000 a year earlier.

"In addition to the weakness in the residential construction market, property values exhibited further declines, particularly for land and developed building lots, resulting in additional charge-offs and impairment reserves," President and CEO Shaun A. Burke said in the earnings release. "However, while there is still much work to be accomplished, we are encouraged by the further reduction in our exposure to residential construction loans and the significant slowdown in the surfacing of new problem assets."

Shares of Guaranty Federal Bancshares closed Tuesday at $5.60, compared to a 52-week range of $3.85-$7.50.