CEO Comments
“Despite continued competitive and interest rate
pressures, the Company experienced strong earnings in the third
quarter, recognizing significant improvement over the same quarter
in 2020. Net interest margin expanded as we’ve seen the positive
results of the previous quarter’s loan growth, the repricing of
higher-cost certificates of deposit and the repayment of a 6.92%
fixed-rate trust preferred issuance. Additionally, the full
repayment of $50 million of wholesale funding liabilities during
the current quarter has made an immediate positive impact to
capital levels and will further improve interest expense and net
interest margin going forward. The low interest rate environment
and strong housing market continue to keep our mortgage team
closing loans at a record pace which contributed significant fee
income to our quarterly results. We expect to finish 2021 strong
and are already looking forward to 2022 and beyond.”
- Shaun A. Burke, President and Chief Executive Officer
Highlights of Third Quarter
2021
- Net income available to common
shareholders for the quarter was $3.4 million as compared to $2.5
million in the second quarter of 2021 and $1.9 million earned
during the third quarter of 2020. This resulted in diluted earnings
per common share of $0.78 for the third quarter of 2021 compared to
$0.58 for the second quarter of 2021 and $0.44 earned during the
third quarter of 2020.
- Annualized return on average assets
and average equity were 1.12% and 14.06%, respectively, when
compared to 0.67% and 8.60% during the third quarter of 2020.
- Net interest margin (NIM) increased
to 3.30% for the quarter compared to 2.90% for the third quarter of
2020. Excluding the impacts of interest and fee income from the
SBA’s Paycheck Protection Program (PPP), NIM would have been 3.01%
for the quarter compared to 2.90% during the prior year quarter.
Loan balances forgiven and repaid under the PPP were $20.1 million
for the quarter.
- As of September 30, 2021, there
were no loans under modification or deferment due to the financial
hardship from the COVID-19 pandemic.
- Non-performing asset balances
declined $625,000 (6%) to $10.6 million. This resulted in a
percentage to total assets of 0.91% as of September 30, 2021.
- During September, the Company
executed a de-leveraging transaction whereby utilizing the proceeds
from the sale of $43 million in investment securities and $7
million of excess cash to terminate an interest rate swap and
payoff $50 million in higher-cost FHLB advances. The $2.7 million
of gains recognized on the investment sales were used to offset the
prepayment loss on the interest rate swap of $2.6
million. The immediate financial impacts are as
follows:
- Balance sheet – reducing both lower
yielding long-term assets and higher cost long-term borrowings,
while increasing the Company’s tangible common equity ratio
- Income statement – reducing cost of
funds, expanding net interest margin and improving return on
average assets due to the reduced total asset size
- The Company declared its 30th
consecutive quarterly dividend on September 30, 2021.
Select Quarterly Financial
Data
Below are selected financial results for the Company’s third
quarter of 2021, compared to the second quarter of 2021 and the
third quarter of 2020.
| |
Quarter ended |
| |
September 30, 2021 |
June 30, 2021 |
September 30, 2020 |
| |
(Dollar amounts in thousands, except per share data) |
|
Net income available to common shareholders |
$ |
3,400 |
$ |
2,516 |
$ |
1,898 |
| |
|
|
|
| Diluted income per common
share |
$ |
0.78 |
$ |
0.58 |
$ |
0.44 |
| Common shares outstanding |
4,346,467 |
4,346,467 |
4,337,615 |
| Average common shares
outstanding , diluted |
4,376,612 |
4,372,205 |
4,346,277 |
| |
|
|
|
| Annualized return on average
assets |
1.12% |
0.83% |
0.67% |
| Annualized return on average
common equity |
14.06% |
11.03% |
8.60% |
| Net interest margin |
3.30% |
2.94% |
2.90% |
| Efficiency ratio |
71.14% |
68.34% |
70.31% |
| |
|
|
|
| Common equity to assets
ratio |
8.19% |
7.78% |
7.74% |
| Tangible common equity to
tangible assets |
7.95% |
7.53% |
7.45% |
| Book value per common
share |
$ |
21.95 |
$ |
21.45 |
$ |
20.24 |
| Tangible book value per common
share |
$ |
21.27 |
$ |
20.71 |
$ |
19.42 |
| Nonperforming assets to total
assets |
0.91% |
0.93% |
1.03% |
The following were items impacting the third quarter 2021
operating results as compared to the same quarter in 2020 and the
financial condition results compared to December 31, 2020:
Interest Income – Total interest income
increased $891,000 (9%) during the quarter. The Company experienced
a $66.7 million increase in the average balance of total
interest-earning assets during the quarter, however that growth was
primarily in lower yielding cash and investment securities. A sharp
decline in key interest rates over the past year offset the strong
volume and compressed offering rates on new and existing earning
assets. However, the Company’s total earning asset yield increased
7 basis points to 3.81% during the quarter primarily due to the
impact of PPP loan fee income which was $899,000 for the quarter
compared to $242,000 during the same quarter of 2020.
Interest Expense - Total interest expense
decreased $768,000 (34%) during the quarter. The decrease is
primarily driven by lower costs on nearly all interest-bearing
deposits and borrowings in the current low-rate
environment. The average balance of interest-bearing
liabilities declined $20.1 million (2%), while the average cost of
interest-bearing liabilities decreased 34 basis points to
0.70%. To fund its asset growth and maintain prudent
liquidity levels going forward, the Company will continue to
utilize a cost-effective mix of retail and commercial core deposits
along with non-core, wholesale funding as necessary.
See the Analysis of Net Interest Income and
Margin table below for more detailed information.
Asset Quality, Provision for Loan Loss Expense and
Allowance for Loan Losses – The Company’s nonperforming
assets decreased to $10.6 million (45%) as of September 30, 2021,
compared to $19.2 million as of December 31, 2020.
Based on its reserve analysis and methodology, the Company
recorded $100,000 in provision for loan loss expense during the
quarter compared to $950,000 recorded during the prior year
quarter. The expense amount was considered necessary primarily due
to loan portfolio growth, offset by reductions in non-performing,
delinquent and loans impacted by COVID-19. As of
September 30, 2021, the allowance for loan losses of $10.6 million
was 1.33% of gross loans outstanding (excluding mortgage loans held
for sale), an increase from the 1.28% as of December 31, 2020.
In accordance with generally accepted accounting principles for
acquisition accounting, the loans acquired through a prior
acquisition were recorded at fair value; therefore, there was no
allowance associated with the loans at acquisition. Management
continues to evaluate the allowance needed on the acquired loans
factoring in the net remaining discount of approximately $449,000
as of September 30, 2021.
Management believes the allowance for loan losses is at a
sufficient level to provide for loan losses in the Company’s
existing loan portfolio.
Non-interest Income – Non-interest income
increased $2.2 million (69%) during the quarter compared to the
same quarter in 2020 due to the following factors:
- A significant portion of the change is due to the $2.7 million
in gains recognized on available-for-sale securities primarily due
to the de-leveraged transaction discussed above.
- Service charge income increased $130,000
(35%).
- Offsetting these items was a decline of $320,000 (17%) in fees
generated from sales of mortgage and SBA loans, as well as
commercial loan swaps when compared to the same quarter of
2020.
Non-interest Expense – Non-interest expenses
increased $2.9 million (37%) during the quarter when compared to
the same quarter in 2020 due to the following factors. A
significant portion of the increase is due to the $2.6 million
prepayment loss recognized on the termination of an interest rate
swap discussed above.
Capital – As of September 30, 2021,
stockholders’ equity increased $6.5 million (7%) to $95.5 million
from $89.0 million as of December 31, 2020. Net income for the nine
months ended exceeded dividends paid or declared by $6.2
million. On a per common share basis, tangible book
value increased to $21.27 at September 30, 2021 as compared to
$19.71 as of December 31, 2020.
From a regulatory capital standpoint, all capital ratios for the
Company and Bank remain strong and above regulatory
requirements.
Non-Generally Accepted Accounting
Principle (GAAP) Financial Measures
In addition to the GAAP financial results presented in this
press release, the Company presents non-GAAP financial measures
discussed below. These non-GAAP measures are provided to enhance
investors’ overall understanding of the Company’s current financial
performance. Additionally, Company management believes that this
presentation enables meaningful comparison of financial performance
in various periods. However, the non-GAAP financial results
presented should not be considered a substitute for results that
are presented in a manner consistent with GAAP. A limitation of the
non-GAAP financial measures presented is that the adjustments
concern gains, losses or expenses that the Company does expect to
continue to recognize; the adjustments of these items should not be
construed as an inference that these gains or expenses are unusual,
infrequent or non-recurring. Therefore, Company management believes
that both GAAP measures of its financial performance and the
respective non-GAAP measures should be considered together.
Operating Income
Operating income is a non-GAAP financial measure that adjusts
net income for the following non-operating items:
- Provision for income taxes
- Gains on sales of investment securities
- Commercial loan referral income
- Net gains/losses on foreclosed assets held for sale
- Provision for loan loss expense
- Loss on early termination of interest rate swap
A reconciliation of the Company’s net income to its operating
income for the three and nine months ended September 30, 2021 and
2020 is set forth below.
| |
Quarter ended |
|
Nine months ended |
|
|
September 30, 2021 |
|
September 30, 2020 |
|
September 30, 2021 |
|
September 30, 2020 |
| |
(Dollar amounts are in thousands) |
|
(Dollar amounts are in thousands) |
|
Net income |
$ |
3,400 |
|
|
$ |
1,898 |
|
|
$ |
8,133 |
|
|
$ |
5,886 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Add back: |
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes |
802 |
|
|
418 |
|
|
1,975 |
|
|
1,275 |
|
| Income before income
taxes |
4,202 |
|
|
2,316 |
|
|
10,108 |
|
|
7,161 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Add back/(subtract): |
|
|
|
|
|
|
|
|
|
|
|
|
Net gains on investment securities |
(2,674 |
) |
|
(298 |
) |
|
(2,741 |
) |
|
(461 |
) |
|
Loss on early termination of interest rate swap |
2,580 |
|
|
- |
|
|
2,580 |
|
|
- |
|
|
Commercial loan referral income |
(42 |
) |
|
(161 |
) |
|
(105 |
) |
|
(1,097 |
) |
|
Net (gains) losses on foreclosed assets held for sale |
(53 |
) |
|
(32 |
) |
|
74 |
|
|
49 |
|
|
Provision for loan losses |
100 |
|
|
950 |
|
|
800 |
|
|
2,200 |
|
| |
(89 |
) |
|
459 |
|
|
608 |
|
|
691 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Operating income |
$ |
4,113 |
|
|
$ |
2,775 |
|
|
$ |
10,716 |
|
|
$ |
7,852 |
|
About Guaranty Federal Bancshares,
Inc.
Guaranty Federal Bancshares, Inc. (NASDAQ:GFED)
has a subsidiary corporation offering full banking services. The
principal subsidiary, Guaranty Bank, is headquartered in
Springfield, Missouri, and has 16 full-service branches in Greene,
Christian, Jasper and Newton Counties and a Loan Production Office
in Webster County. Guaranty Bank is a member of the MoneyPass ATM
network which provide its customers surcharge free access to over
37,000 ATMs nationwide. For more information visit the Guaranty
Bank website: www.gbankmo.com.
The Company may from time to time make written
or oral “forward-looking statements,” including statements
contained in the Company’s filings with the SEC, in its reports to
stockholders and in other communications by the Company, which are
made in good faith by the Company pursuant to the “safe harbor”
provisions of the Private Securities Litigation Reform Act of 1995.
Words such as “anticipates,” “estimates,” “believes,” “expects,”
and similar expressions are intended to identify such
forward-looking statements but are not the exclusive means of
identifying such statements.
These forward-looking statements involve risks
and uncertainties, such as statements of the Company’s plans,
objectives, expectations, estimates and intentions, that are
subject to change based on various important factors (some of which
are beyond the Company’s control). The following factors, among
others, could cause the Company’s financial performance to differ
materially from the plans, objectives, expectations, estimates and
intentions expressed in such forward-looking statements:
● the strength of the United States economy in general and the
strength of the local economies in which we conduct operations;●
the effects of the COVID-19 pandemic, including on our credit
quality and business operations, as well as its impact on general
economic and financial market conditions;● the effects of, and
changes in, trade, monetary and fiscal policies and laws, including
interest rate policies of the Federal Reserve, inflation, interest
rates, market and monetary fluctuations;● the timely development of
and acceptance of new products and services and the perceived
overall value of these products and services by users, including
the features, pricing and quality compared to competitors’ products
and services;● the willingness of users to substitute competitors’
products and services for our products and services;● our success
in gaining regulatory approval of our products and services, when
required;● the impact of changes in financial services laws and
regulations (including laws concerning taxes, banking, securities
and insurance);● technological changes;● the ability to
successfully manage and integrate any future acquisitions if and
when our board of directors and management conclude any such
acquisitions are appropriate;● changes in consumer spending and
saving habits;● our success at managing the risks resulting from
these factors; and● other factors set forth in reports and other
documents filed by the Company with the SEC from time to time.
|
Financial Highlights: |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| Operating
Data: |
Quarter ended |
|
|
|
Nine months ended |
| |
September 30, |
|
|
|
September 30, |
| |
2021 |
|
2020 |
|
|
|
2021 |
|
2020 |
| |
(Dollar amounts are in thousands, except per share data) |
| |
|
|
|
|
|
|
|
|
|
| Total interest income |
$ |
10,859 |
|
$ |
9,968 |
|
|
|
$ |
31,025 |
|
$ |
30,926 |
| Total interest expense |
1,469 |
|
2,237 |
|
|
|
5,368 |
|
7,460 |
|
Net interest income |
9,390 |
|
7,731 |
|
|
|
25,657 |
|
23,466 |
| Provision for loan losses |
100 |
|
950 |
|
|
|
800 |
|
2,200 |
|
Net interest income after provision for loan losses |
9,290 |
|
6,781 |
|
|
|
24,857 |
|
21,266 |
| Noninterest income |
|
|
|
|
|
|
|
|
|
|
Service charges |
500 |
|
370 |
|
|
|
1,305 |
|
1,093 |
|
Gain on sale of loans held for sale |
1,105 |
|
1,195 |
|
|
|
3,220 |
|
2,621 |
|
Gain on sale of Small Business Administration loans |
388 |
|
499 |
|
|
|
1,286 |
|
499 |
|
Gain on sale of investments |
2,674 |
|
298 |
|
|
|
2,741 |
|
461 |
|
Commercial loan referral income |
42 |
|
161 |
|
|
|
105 |
|
1,097 |
|
Other income |
809 |
|
747 |
|
|
|
2,293 |
|
1,911 |
| |
5,518 |
|
3,270 |
|
|
|
10,950 |
|
7,682 |
| Noninterest expense |
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
4,631 |
|
4,589 |
|
|
|
13,479 |
|
12,678 |
|
Occupancy |
1,158 |
|
1,165 |
|
|
|
3,430 |
|
3,481 |
|
Loss on early termination of interest rate swap |
2,580 |
|
- |
|
|
|
2,580 |
|
- |
|
Other expense |
2,237 |
|
1,981 |
|
|
|
6,210 |
|
5,628 |
| |
10,606 |
|
7,735 |
|
|
|
25,699 |
|
21,787 |
| Income before income
taxes |
4,202 |
|
2,316 |
|
|
|
10,108 |
|
7,161 |
| Provision for income
taxes |
802 |
|
418 |
|
|
|
1,975 |
|
1,275 |
| Net income |
$ |
3,400 |
|
$ |
1,898 |
|
|
|
$ |
8,133 |
|
$ |
5,886 |
| Net income per common
share-basic |
$ |
0.78 |
|
$ |
0.44 |
|
|
|
$ |
1.87 |
|
$ |
1.36 |
| Net income per common
share-diluted |
$ |
0.78 |
|
$ |
0.44 |
|
|
|
$ |
1.86 |
|
$ |
1.36 |
| |
|
|
|
|
|
|
|
|
|
| Annualized return on average
assets |
1.12% |
|
0.67% |
|
|
|
0.90% |
|
0.73% |
| Annualized return on average
equity |
14.06% |
|
8.60% |
|
|
|
11.74% |
|
9.11% |
| Net interest margin |
3.30% |
|
2.90% |
|
|
|
3.03% |
|
3.11% |
| Efficiency ratio |
71.14% |
|
70.31% |
|
|
|
70.20% |
|
69.95% |
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| Financial Condition
Data: |
As of |
|
|
|
|
|
|
| |
September 30, |
|
December 31, |
|
|
|
|
|
|
| |
2021 |
|
2020 |
|
|
|
|
|
|
| Cash and cash equivalents |
$ |
151,283 |
|
$ |
148,423 |
|
|
|
|
|
|
| Available-for-sale
securities |
151,456 |
|
168,881 |
|
|
|
|
|
|
| Loans, net of allowance for
loan losses |
|
|
|
|
|
|
|
|
|
|
9/30/2021 - $10,566; 12/31/2020 - $9,617 |
786,406 |
|
753,508 |
|
|
|
|
|
|
| Intangibles |
3,104 |
|
3,462 |
|
|
|
|
|
|
| Premises and equipment,
net |
17,180 |
|
17,898 |
|
|
|
|
|
|
| Lease right-of-use assets |
8,188 |
|
8,470 |
|
|
|
|
|
|
| Bank owned life insurance |
31,745 |
|
25,295 |
|
|
|
|
|
|
| Other assets |
16,513 |
|
20,316 |
|
|
|
|
|
|
|
Total assets |
$ |
1,165,875 |
|
$ |
1,146,253 |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| Deposits |
$ |
1,011,296 |
|
$ |
938,673 |
|
|
|
|
|
|
| Advances from correspondent
banks |
16,000 |
|
66,000 |
|
|
|
|
|
|
| Subordinated debentures |
10,310 |
|
15,465 |
|
|
|
|
|
|
| Subordinated notes |
19,598 |
|
19,564 |
|
|
|
|
|
|
| Lease liabilities |
8,308 |
|
8,561 |
|
|
|
|
|
|
| Other liabilities |
4,821 |
|
9,022 |
|
|
|
|
|
|
|
Total liabilities |
1,070,333 |
|
1,057,285 |
|
|
|
|
|
|
| Stockholders' equity |
95,542 |
|
88,968 |
|
|
|
|
|
|
|
Total liabilities and stockholders' equity |
$ |
1,165,875 |
|
$ |
1,146,253 |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| Common equity to assets
ratio |
8.19% |
|
7.76% |
|
|
|
|
|
|
| Tangible common equity to
tangible assets ratio (1) |
7.95% |
|
7.48% |
|
|
|
|
|
|
| Book value per common
share |
$ |
21.95 |
|
$ |
20.51 |
|
|
|
|
|
|
| Tangible book value per common
share (2) |
$ |
21.27 |
|
$ |
19.71 |
|
|
|
|
|
|
| Nonperforming assets |
$ |
10,566 |
|
$ |
19,175 |
|
|
|
|
|
|
(1) Total Assets less Intangibles divided by
Stockholders’ Equity(2) Stockholders’ Equity less Intangibles
divided by Common Shares Outstanding
| Analysis
of Net Interest Income and Margin: |
|
|
|
|
|
|
|
|
|
|
| |
Three months ended 9/30/2021 |
|
|
Three months ended 9/30/2020 |
|
| |
AverageBalance |
|
Interest |
|
Yield /Cost |
|
AverageBalance |
|
Interest |
|
Yield /Cost |
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest-earning: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
$ |
805,039 |
|
$ |
9,555 |
|
|
4.71 |
% |
|
$ |
787,380 |
|
$ |
8,814 |
|
|
4.46 |
% |
| Investment securities |
189,362 |
|
|
1,200 |
|
|
2.51 |
% |
|
152,163 |
|
|
1,004 |
|
|
2.62 |
% |
| Other assets |
134,279 |
|
|
104 |
|
|
0.31 |
% |
|
122,442 |
|
|
150 |
|
|
0.49 |
% |
| Total interest-earning |
1,128,680 |
|
|
10,859 |
|
|
3.81 |
% |
|
1,061,985 |
|
|
9,968 |
|
|
3.74 |
% |
| Noninterest-earning |
73,741 |
|
|
|
|
|
|
|
|
70,028 |
|
|
|
|
|
|
|
| |
$ |
1,202,421 |
|
|
|
|
|
|
|
|
$ |
1,132,013 |
|
|
|
|
|
|
|
| LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest-bearing: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Savings accounts |
$ |
57,921 |
|
|
18 |
|
|
0.12 |
% |
|
$ |
49,079 |
|
|
19 |
|
|
0.15 |
% |
| Transaction accounts |
523,845 |
|
|
416 |
|
|
0.32 |
% |
|
521,312 |
|
|
543 |
|
|
0.41 |
% |
| Certificates of deposit |
160,003 |
|
|
429 |
|
|
1.06 |
% |
|
188,688 |
|
|
938 |
|
|
1.98 |
% |
| FHLB advances |
65,457 |
|
|
233 |
|
|
1.41 |
% |
|
66,000 |
|
|
303 |
|
|
1.83 |
% |
| Other borrowed funds |
594 |
|
|
2 |
|
|
1.34 |
% |
|
3,807 |
|
|
41 |
|
|
4.28 |
% |
| Subordinated notes, net |
19,591 |
|
|
263 |
|
|
5.33 |
% |
|
13,478 |
|
|
181 |
|
|
5.34 |
% |
| Subordinated debentures issued
to Capital Trusts |
10,310 |
|
|
108 |
|
|
4.16 |
% |
|
15,465 |
|
|
212 |
|
|
5.45 |
% |
| Total interest-bearing |
837,721 |
|
|
1,469 |
|
|
0.70 |
% |
|
857,829 |
|
|
2,237 |
|
|
1.04 |
% |
| Noninterest-bearing |
268,750 |
|
|
|
|
|
|
|
|
186,384 |
|
|
|
|
|
|
|
| Total liabilities |
1,106,471 |
|
|
|
|
|
|
|
|
1,044,213 |
|
|
|
|
|
|
|
| Stockholders’ equity |
95,950 |
|
|
|
|
|
|
|
|
87,800 |
|
|
|
|
|
|
|
| |
$ |
1,202,421 |
|
|
|
|
|
|
|
|
$ |
1,132,013 |
|
|
|
|
|
|
|
| Net earning balance |
$ |
290,959 |
|
|
|
|
|
|
|
|
$ |
204,156 |
|
|
|
|
|
|
|
| Earning yield less costing
rate |
|
|
|
|
|
|
3.11 |
% |
|
|
|
|
|
|
|
2.70 |
% |
|
Net interest income, and net yield spread on interest earning
assets |
|
|
$ |
9,390 |
|
|
3.30 |
% |
|
|
|
$ |
7,731 |
|
|
2.90 |
% |
| Ratio of interest-earning
assets to interest-bearing liabilities |
|
|
|
135 |
% |
|
|
|
|
|
|
|
124 |
% |
|
|
|
Contacts: Shaun A. Burke (CEO) or Carter M. Peters (CFO),
1-833-875-2492
Guaranty Federal Bancsha... (NASDAQ:GFED)
과거 데이터 주식 차트
부터 2월(2) 2025 으로 3월(3) 2025
Guaranty Federal Bancsha... (NASDAQ:GFED)
과거 데이터 주식 차트
부터 3월(3) 2024 으로 3월(3) 2025
