This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Guaranty Federal Bancshares, Inc. Announces Preliminary Third Quarter 2012 Financial Results

SPRINGFIELD, Mo., Oct. 19, 2012 (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, 2012.

Third Quarter 2012 Financial Results

  • Earnings (loss) per diluted common share for the third quarter was $(.34), a decrease from the $.35 earned in the third quarter in 2011.
  • Net loss was ($717,000) for the quarter, a decline from net income of $1.2 million earned for the third quarter in 2011.
  • Provision for loan loss expense was $2.6 million for the quarter, an increase of $1.7 million from the third quarter in 2011. This was primarily due to increased reserves on a non-performing credit identified during the second quarter and further discussed below.
  • Non-performing assets were $24.1 million at September 30, 2012, a decline of $18.0 million or 43% from June 30, 2012.

The Company announces that net loss for the third quarter ended September 30, 2012 was ($717,000) as compared to net income of $1,216,000 for the third quarter ended September 30, 2011. After preferred stock dividends and accretion, diluted loss per common share was $(.34), a decrease from the $.35 per diluted common share earned during the third quarter in 2011.

The following were key issues that contributed to the third quarter financial results as compared to the same quarter in 2011:

Net interest income   The Company continues to focus on improving net interest margin. The average cost of interest bearing deposits and other borrowings continues to be the main driver in margin improvement. The Company is benefiting from the reduction in wholesale funding balances (primarily Federal Home Loan Bank (FHLB) advances and repurchase agreements) of approximately $40 million during the latter half of 2011. However, asset yield has been negatively impacted from the level of nonaccrual loans and declining loan balances. This is the main reason for the reduction in net interest income for the quarter. The Company continues to closely manage loan pricing by increasing yield on renewing credits.

Non-interest income Non-interest income decreased $619,000 during the quarter due to a few significant factors. First, the Company experienced a significant increase in losses recognized on its foreclosed assets held for sale which were $1.0 million for the quarter compared to $83,000 in the prior year quarter. The Company sold two properties for a combined loss of $350,000 and recognized write-downs on three existing foreclosed properties for $670,000 based on current estimated fair value. Offsetting these losses was a strong mortgage volume resulting in an increase in mortgage fee income. Income recognized on sales of mortgage loans was $507,000 during the quarter compared to $370,000 in the prior year quarter. Secondly, the Company sold certain state low-income housing tax credits on two projects recognizing $282,000 in miscellaneous income during the quarter. The Company did not sell any tax credit assets in 2011.

Non-interest expense – Non-interest expenses increased $219,000 over the prior year quarter primarily as a result of increased professional fees. The Company recognized expenses of $221,000 in conjunction with a Registration Statement on Form S-1 filed with the Securities and Exchange Commission (the "SEC"). This filing was required for the United States Department of the Treasury's (the "Treasury") proposed public auction of the Company's preferred stock under the Capital Purchase Program (the "CPP"). The Treasury continues to hold 100% of the Company's preferred stock.

All other non-interest expense categories have been closely managed and controlled, including FDIC deposit insurance premiums expense, which declined $110,000 for the quarter as compared to the same quarter in 2011.

Provision for loan loss expense and allowance for loan losses – Based on its reserve analysis and methodology, the Company recorded a provision for loan loss expense of $2.6 million during the quarter, an increase of $500,000 from the second quarter of 2012 and an increase of $1.7 million from the third quarter of 2011. The provision for the quarter primarily relates to additional reserves determined necessary due to new information obtained on a large loan relationship in which a fraud scheme was uncovered in the second quarter. This fraud scheme relates to the borrower's investment portfolio that was a significant portion of the collateral securing the credit as well as providing liquidity to operate other business ventures in which the Company had a security interest.

The allowance for loan losses as of September 30, 2012 was 1.80% of gross loans outstanding (excluding mortgage loans held for sale) compared to 2.17% as of December 31, 2011.

Non-performing assets – The Company experienced a significant decrease in nonperforming assets to $24.1 million as of September 30, 2012, representing a decrease of $18.0 million or 43% from June 30, 2012. Nonperforming assets as a percentage of total assets declined from 6.4% at June 30, 2012 to 3.7% at September 30, 2012. Reducing non-performing assets has been and will continue to be a primary focus of the Company.

"The loss in the quarter was directly related to the negative impact of high non-performing assets. However, during the third quarter we made significant progress, reducing problem assets nearly 43% and lowering the nonperforming assets to total assets ratio from 6.4% to 3.7%. We continue to aggressively work to eliminate the challenging assets as our core operations remain steady in the slowly improving economy," said Shaun A. Burke, President and Chief Executive Officer.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG

Markets

DOW 18,135.72 +38.82 0.21%
S&P 500 2,101.04 +2.51 0.12%
NASDAQ 4,982.8090 +15.6680 0.32%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs