Guaranty Federal Bancshares, Inc. Announces Third Quarter 2010 Financial Results
SPRINGFIELD, Mo., Oct. 15, 2010 (GLOBE NEWSWIRE) -- Guaranty Federal Bancshares, Inc., (Nasdaq:GFED), the holding company (the "Company") for Guaranty Bank, today announces the following results for its third quarter ended September 30, 2010.
Third Quarter 2010 Financial Highlights
- Earnings per share for the quarter increased to $.09 as compared to $.08 for the second quarter of 2010.
- Net income for the quarter increased to $522,000 as compared to $493,000 for the second quarter of 2010.
- Net interest margin improved 56 basis points to 2.48% for the quarter as compared to the second quarter in 2009.
- Equity to assets increased to 7.58% as compared to 6.97% at December 31, 2009.
- Book value per common share increased to $14.12 as compared to $13.49 at December 31, 2009.
The Company announces that net income for the third quarter ended September 30, 2010 was $522,000 compared to $574,000 for the third quarter ended September 30, 2009. After preferred dividends, diluted earnings per share was $.09, a decrease from the $.11 per diluted share earned during the third quarter ended September 30, 2009. On a year to date basis, diluted earnings per share has increased $1.16 to $.24 per share as compared to a diluted loss per share of $.92 earned in 2009.There are a few key issues that contributed to the results for the third quarter:
- Net interest income - The improvement in the Company's net interest income has positively impacted earnings during the year which was primarily due to the Company's management of interest expense. The Company continues to manage and reduce 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. However, loan yield was negatively impacted during the quarter due to the expiration of interest income being recognized on a matured interest rate swap as of June 30, 2010. The effect on quarterly interest income was approximately $255,000.
- Provision for loan losses - The Company recorded a provision for loan loss of $850,000 during the quarter (which was a decrease from the first two quarters of 2010) compared to $670,000 for the prior year quarter. Also, on a year to date basis, provision for loan loss of $2,750,000 has been recognized in 2010 compared to $4,950,000 for the same period in 2009. The allowance for loan losses as of September 30, 2010 was 2.48% of gross loans outstanding (excluding mortgage loans held for sale).
- Non-interest income – The decrease in non-interest income of $151,000 was due to a few factors both positively and negatively impacting income. First, the Company recognized $342,000 in gains on sales of investment securities in the prior year quarter compared to only $41,000 in the current year quarter. However, offsetting these declines, the Company experienced an increase of $158,000 in its gain on sale of fixed rate mortgage loans for the current year quarter compared to the prior year quarter. Also, 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 third quarter.
- Non-interest expense – These expenses continue to be managed and controlled in 2010 compared to 2009 as non-interest expense has declined on a year to date basis. For the quarter, these expenses do reflect an increase over the prior year quarter primarily due to personnel costs. Personnel costs have increased $146,000 quarter over quarter due to key associates being added in the latter half of the third quarter of 2009 and in the second quarter of 2010, plus increases in employee benefit expenses.
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