Guaranty Federal Bancshares, Inc. Announces Second Quarter 2010 Financial Results
SPRINGFIELD, Mo., July 14, 2010 (GLOBE NEWSWIRE) -- Guaranty Federal Bancshares, Inc., (Nasdaq:GFED), the holding company (the "Company") for Guaranty Bank, today announces the following results for its second quarter ended June 30, 2010.
Second Quarter 2010 Financial Highlights
- Earnings per share for the quarter increased $.81 compared to the second quarter ended June 30, 2009.
- Net income increased $2.1 million for the quarter compared to the second quarter ended June 30, 2009.
- Net interest margin improved 80 basis points to 2.62% for the quarter as compared to the second quarter in 2009 and increased 21 basis points over the first quarter of 2010.
- Nonperforming assets decreased $3.6 million from December 31, 2009.
- Equity to assets increased to 7.27% as compared to 6.97% at December 31, 2009.
- Book value per common share increased to $14.07 as compared to $13.49 at December 31, 2009.
The Company announces that net income for the second quarter ended June 30, 2010 was $493,000 compared to a net loss of ($1,632,000) for the second quarter ended June 30, 2009. After preferred dividends, diluted earnings per share was $.08, an increase from the ($.73) per diluted share during the second quarter ended June 30, 2009. This was also an increase from the $.07 per diluted share the Company earned during the first quarter ended March 31, 2010.There are a few key issues that contributed to earnings for the second quarter:
- Net interest margin - The increase in the Company's net interest income positively impacted earnings during the second quarter which was primarily due to the Company's management of interest expense. First, at the beginning of 2010, the Company reduced its cost of funding on money market deposits generated from a very successful deposit generating campaign in the first quarter of 2009. Also, due to the increase in liquidity in the prior year, the Company had the ability to significantly reduce its cost of retail certificates of deposit as well as reduce those balances. On the asset side of the balance sheet, while loans have declined due to weak loan demand and specific foreclosures, the Company continues to closely manage loan pricing by establishing rate floors, increasing existing rate floors and focusing on the reduction of nonaccrual loans, which ultimately has a positive impact on the Company's yield on earning assets.
- Provision for loan losses - The Company recorded a provision for loan loss of $950,000 during the quarter (compared to $3.3 million for the prior year quarter). The allowance for loan losses as of June 30, 2010 was 2.35% of gross loans outstanding (excluding mortgage loans held for sale).
- Non-interest income – The decrease in non-interest income of $462,000 was due to a few factors both positively and negatively impacting income. First, the Company recognized $315,000 in gains on sales of investment securities in the prior year quarter compared to only $14,000 in the current year quarter. Secondly, the Company recognized a net loss of $56,000 on its foreclosed assets held for sale in the current year quarter compared to net income $98,000 in the prior year quarter. Third, the Company experienced a decline of $85,000 in its gain on sale of fixed rate mortgage loans for the current year quarter compared to the prior year quarter. However, offsetting these declines, the Company recognized earnings of $98,000 from its bank owned life insurance purchased in October 2009, as compared to $0 during the prior year second quarter.
- Non-interest expense – The Company has successfully managed and controlled non-interest expenses which decreased $277,000 quarter over quarter, even though several key associates were added in 2009 which has increased personnel costs in 2010. The most impacting reason in the decline in overall expenses is the decrease in Federal Deposit Insurance Corporation premiums of $356,000 primarily due to the one-time assessment of $341,000 that was incurred during the second quarter of 2009.
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