Guaranty per-share earnings sink 63%

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.

Holding company shares (Nasdaq: GFED) closed Friday at $24.45, compared to a 52-week range of $23.51 to $30.85.