Guaranty Bank ends year with $3.5M loss

Increased provision for loan losses, asset write-downs and higher FDIC insurance premiums are to blame for Guaranty Federal Bancshares Inc.'s fourth-quarter and year-end losses.

The Springfield-based bank on Friday reported a $1.89 million loss for the fourth quarter and a $3.47 million loss for 2008, compared to a $6.1 million profit in 2007. Earnings per share were -72 cents for the quarter and -$1.33 for the year.

During the quarter, Guaranty increased its provision for loan losses by $3.4 million and saw noninterest income fall by $1.3 million, primarily due to write-downs on foreclosed assets and impairment losses in the bank's investment portfolio. Several new hires and a 1,463 percent, or $166,145, increase in FDIC insurance premiums pushed noninterest expense up 10 percent.

"Our financial results in 2008 were very disappointing as our company and industry experienced the impact of our nation's financial and credit crisis," Guaranty President and CEO Shaun Burke said in a news release. "We've worked hard to position our balance sheet to withstand the current challenges, and we continue to aggressively improve our liquidity level."

Guaranty last week announced that it has received preliminary approval to sell $17 million in preferred stock and related warrants to the U.S. Treasury through the government's Capital Purchase Program.

Bank shares (Nasdaq: GFED) closed Friday at $4.63, compared to a 52-week range of $3.29 to $27.49.[[In-content Ad]]