Springfield-based Guaranty Federal Bancshares Inc. returned to profitability in the third quarter but remains in the red for the year, the company reported Tuesday.
The holding company for Guaranty Bank had third-quarter earnings per share of 11 cents, down from 59 cents in third-quarter 2007, but an improvement over a 96-cent-per-share loss in this year's second quarter, according to a news release. Guaranty has a 61-cent per-share loss year to date, compared to a $1.70 per-share profit for the first nine months of 2007.
Net income in the third quarter totaled $299,000, down 81 percent from $1.6 million a year ago. The company has a year-to-date loss of $1.58 million, compared to a $4.78 million profit reported at this time last year.
Guaranty attributes the decline to a $1.5 million increase in its provision for loan losses during the quarter - up 698 percent from last year - "to compensate for significant loan growth, increased reserves on specific credits and continued concerns over the local and national economy," the release said.
Other factors were a 27 percent decrease in noninterest income due to the sale of shares of the company's Freddie Mac equity, and a 6 percent increase in noninterest expense primarily due to new key associates hired in fiscal 2007.
"We are taking an aggressive approach to identifying borrowers negatively impacted by the deteriorating economy," Guaranty Bank President and CEO Shaun Burke said in the release. "Closely monitoring asset quality and working with our distressed borrowers will continue to be a top priority for our lending team."
Guaranty shares (Nasdaq: GFED) closed Tuesday at $9, compared to a 52-week range of $8.21 to $29.99.[[In-content Ad]]
