Guaranty Financial Corporation Reports Net Income of $168,000 for The Quarter Ended March 31, 2001 and an Agreement to Sell its Retail Banking Branch Office in Suburban Richmond

Apr 24, 2001, 01:00 ET from Guaranty Financial Corporation

    CHARLOTTESVILLE, Va., April 24 /PRNewswire Interactive News Release/ --
 Guaranty Financial Corporation (Nasdaq: GSLC), a bank holding company
 operating primarily through its wholly owned subsidiary, Guaranty Bank, today
 reported earnings of $168,000 ($.09 per share) for the quarter ended March 31,
 2001.  This result is lower than earnings of $244,000 ($.12 per share) for the
 same period of 2000 because of a decline in net interest income and an
 increase in operating and other expenses.
     The decline in net interest income is due to a decrease in the average
 amount of loans outstanding during the quarter.  For the three months ended
 March 31, 2001, net interest income was $2,176,000 as compared to $2,309,000
 for the same period a year ago.  The net interest margin was 3.79% for the
 three months ended March 31, 2001, an increase of three basis points over the
 net interest margin reported for the same time period a year ago.  The
 provision for loan loss was $150,000 for the three months ended March 31,
 2001, compared to $130,000 in the prior year.
     Loan and deposit fees and loan servicing income increased by 21.3% to
 $234,400 for the most recent quarter as compared to $193,200 for the same
 period a year ago.  Net gains on the sale of mortgage loans and securities
 were $175,000 for the three months ended March 31, 2001, compared to a net
 loss of $71,400 reported a year ago.
     Operating expenses were $2,310,000 for the quarter ended March 31, 2001, a
 $292,000 increase over the amount reported for the same period last year.  The
 increase is primarily attributable to the additional operating expenses of the
 Forest Lakes branch in Albemarle County, severance payments to former
 employees of $165,000 and a $60,000 additional loss provision on a foreclosed
 commercial property.
     The Company also announced that it has reached agreement with Central
 Virginia Bank to sell its retail branch office in suburban Richmond.  The
 transaction, which remains subject to regulatory approval, includes the
 assumption of deposit accounts and an option by Central Virginia Bank to
 acquire selected consumer and commercial loans.  No material gain or loss is
 expected as a result of this sale.  Closing is expected to occur in mid-summer
 2001
     "While we are disappointed with our net earnings for the most recent
 quarter, we are pleased with the improvements in our balance sheet as noted by
 our increase in liquidity and core deposit growth," said Douglas E. Caton,
 Chairman of the Board.  "We are continuing the process of searching for a new
 Chief Executive Officer and are confident that we will have new leadership in
 the near future.  The sale of our Richmond area branch will allow us to
 concentrate our resources on our core markets of Charlottesville and
 Harrisonburg.  The opening of our new Forest Lakes office allows us to
 solidify our position in the northern Albemarle County market.  Our presence
 in these markets and our improving balance sheet provide the bank with a solid
 base going forward."
     Total assets decreased 6.2% to $256.3 million at March 31, 2001, from
 $273.1 million at March 31, 2000.  For the same time periods, net loans
 outstanding decreased 11.6% to $194.7 million from $220.3 million.  The
 average yield on the loan portfolio for the three months ended March 31, 2001,
 was 9.18%, compared to 8.94% for the same time period in the prior year.  The
 provision for loan losses was $150,000 for the three months ended March 31,
 2001, as compared to $130,000 for the same time period in the prior year.  At
 March 31, 2001, the allowance for loan losses was $2,512,000 or 1.27% of total
 loans.  Net charge-offs for the three months ended March 31, 2001, were
 $34,000 or .02% of total loans outstanding at March 31, 2001.  At March 31,
 2001, the Company had $2.1 million of loans that were 90 days or more past
 due.  Of this total, only $263,000 of loans was considered to be non-accrual.
     Deposits increased 2.4% to $226.0 million at March 31, 2001, from $220.8
 million at March 31, 2000.  The average cost of interest bearing deposits for
 the three months ended March 31, 2001, was 5.27%, an increase of 26 basis
 points from the average cost of interest bearing deposits for the three months
 ended March 31, 2000.  With the decrease in loans and total assets, the
 Company was also able to decrease its reliance on borrowed money.  Advances
 from the Federal Home Loan Bank at March 31, 2001, decreased to $6 million as
 compared to $25 million a year ago.
     Certain information contained in this discussion may include "forward-
 looking statements" within the meaning of Section 27A of the Securities Act of
 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
 amended.  These forward-looking statements are generally identified by phrases
 such as "the Company expects," "the Company believes" or words of similar
 import.  Such forward-looking statements involve known and unknown risks
 including, but not limited to, changes in general economic and business
 conditions, interest rate fluctuations, competition within and from outside
 the banking industry, new products and services in the banking industry, risks
 inherent in making loans such as repayment risks and fluctuating collateral
 values, changing trends in customer profiles and changes in laws and
 regulations applicable to the Company.  Although the Company believes that its
 expectations with respect to the forward-looking statements are based upon
 reliable assumptions within the bounds of its knowledge of its business and
 operations, there can be no assurance that actual results, performance or
 achievements of the Company will not differ materially from any future
 results, performance or achievements expressed or implied by such forward-
 looking statements.  For more details on factors that could affect
 expectations, see the Company's Annual Report on 10-KSB for the year ended
 December 31, 2000, as filed with the Securities and Exchange Commission.
 
     Guaranty Financial Corporation is the holding company of Guaranty Bank,
 which currently operates nine full-service banking offices in Charlottesville,
 Harrisonburg, Fluvanna County and Henrico County.  With the pending sale of
 the Wellesley branch in Henrico County, the Company has no further plans to
 open or close any additional offices.  At March 31, 2001, Guaranty Financial
 Corporation had total assets of $256.4 million and total deposits of $226.0.
 Equity capital of $15.6 million represents 6.10% of total assets.  Estimated
 total regulatory capital for the holding company at March 31, 2001 was $24.5
 million or 12.39% of total risk weighted assets.  At March 31, 2001 the
 holding company's Tier 1 risk based capital was 10.87% and its leverage ratio
 was 8.60%.  Book value per share was $7.97 at March 31, 2001.
 
 
     Guaranty Financial Corporation
     Financial Highlights
                                                          March 31,
                                                     2001           2000
     Total Assets                                $256,334,000   $273,137,000
     Loans Receivable, Net                       $194,706,000   $220,281,000
     Deposits                                    $225,986,000   $220,754,000
     Stockholders' Equity                         $15,629,000    $14,533,000
     Shares Outstanding                             1,961,727      1,961,727
     Net Book Value Per Share                           $7.97          $7.41
 
     Three Months Ended
     March 31,
                                                       2001           2000
     Net Income                                      $168,000       $244,000
     Weighted Average Shares                        1,961,727      1,961,727
     Loan Loss Provision                             $150,000       $130,000
     Basic & Diluted Earnings Per Share                 $0.09          $0.12
 
 
     Guaranty Bank - Regulatory Capital at March 31, 2001
 
                      Actual        Actual      Amount    Percent     Excess
                      Amount       Percent     Required   Required    Amount
     Tier 1
      Risk
      Based        $22,040,000      11.01%    $8,005,000   4.00%  $14,035,000
     Total Risk
      Based
      Capital      $24,837,000      12.26%   $16,010,000   8.00%   $8,737,000
 
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SOURCE Guaranty Financial Corporation
    CHARLOTTESVILLE, Va., April 24 /PRNewswire Interactive News Release/ --
 Guaranty Financial Corporation (Nasdaq: GSLC), a bank holding company
 operating primarily through its wholly owned subsidiary, Guaranty Bank, today
 reported earnings of $168,000 ($.09 per share) for the quarter ended March 31,
 2001.  This result is lower than earnings of $244,000 ($.12 per share) for the
 same period of 2000 because of a decline in net interest income and an
 increase in operating and other expenses.
     The decline in net interest income is due to a decrease in the average
 amount of loans outstanding during the quarter.  For the three months ended
 March 31, 2001, net interest income was $2,176,000 as compared to $2,309,000
 for the same period a year ago.  The net interest margin was 3.79% for the
 three months ended March 31, 2001, an increase of three basis points over the
 net interest margin reported for the same time period a year ago.  The
 provision for loan loss was $150,000 for the three months ended March 31,
 2001, compared to $130,000 in the prior year.
     Loan and deposit fees and loan servicing income increased by 21.3% to
 $234,400 for the most recent quarter as compared to $193,200 for the same
 period a year ago.  Net gains on the sale of mortgage loans and securities
 were $175,000 for the three months ended March 31, 2001, compared to a net
 loss of $71,400 reported a year ago.
     Operating expenses were $2,310,000 for the quarter ended March 31, 2001, a
 $292,000 increase over the amount reported for the same period last year.  The
 increase is primarily attributable to the additional operating expenses of the
 Forest Lakes branch in Albemarle County, severance payments to former
 employees of $165,000 and a $60,000 additional loss provision on a foreclosed
 commercial property.
     The Company also announced that it has reached agreement with Central
 Virginia Bank to sell its retail branch office in suburban Richmond.  The
 transaction, which remains subject to regulatory approval, includes the
 assumption of deposit accounts and an option by Central Virginia Bank to
 acquire selected consumer and commercial loans.  No material gain or loss is
 expected as a result of this sale.  Closing is expected to occur in mid-summer
 2001
     "While we are disappointed with our net earnings for the most recent
 quarter, we are pleased with the improvements in our balance sheet as noted by
 our increase in liquidity and core deposit growth," said Douglas E. Caton,
 Chairman of the Board.  "We are continuing the process of searching for a new
 Chief Executive Officer and are confident that we will have new leadership in
 the near future.  The sale of our Richmond area branch will allow us to
 concentrate our resources on our core markets of Charlottesville and
 Harrisonburg.  The opening of our new Forest Lakes office allows us to
 solidify our position in the northern Albemarle County market.  Our presence
 in these markets and our improving balance sheet provide the bank with a solid
 base going forward."
     Total assets decreased 6.2% to $256.3 million at March 31, 2001, from
 $273.1 million at March 31, 2000.  For the same time periods, net loans
 outstanding decreased 11.6% to $194.7 million from $220.3 million.  The
 average yield on the loan portfolio for the three months ended March 31, 2001,
 was 9.18%, compared to 8.94% for the same time period in the prior year.  The
 provision for loan losses was $150,000 for the three months ended March 31,
 2001, as compared to $130,000 for the same time period in the prior year.  At
 March 31, 2001, the allowance for loan losses was $2,512,000 or 1.27% of total
 loans.  Net charge-offs for the three months ended March 31, 2001, were
 $34,000 or .02% of total loans outstanding at March 31, 2001.  At March 31,
 2001, the Company had $2.1 million of loans that were 90 days or more past
 due.  Of this total, only $263,000 of loans was considered to be non-accrual.
     Deposits increased 2.4% to $226.0 million at March 31, 2001, from $220.8
 million at March 31, 2000.  The average cost of interest bearing deposits for
 the three months ended March 31, 2001, was 5.27%, an increase of 26 basis
 points from the average cost of interest bearing deposits for the three months
 ended March 31, 2000.  With the decrease in loans and total assets, the
 Company was also able to decrease its reliance on borrowed money.  Advances
 from the Federal Home Loan Bank at March 31, 2001, decreased to $6 million as
 compared to $25 million a year ago.
     Certain information contained in this discussion may include "forward-
 looking statements" within the meaning of Section 27A of the Securities Act of
 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
 amended.  These forward-looking statements are generally identified by phrases
 such as "the Company expects," "the Company believes" or words of similar
 import.  Such forward-looking statements involve known and unknown risks
 including, but not limited to, changes in general economic and business
 conditions, interest rate fluctuations, competition within and from outside
 the banking industry, new products and services in the banking industry, risks
 inherent in making loans such as repayment risks and fluctuating collateral
 values, changing trends in customer profiles and changes in laws and
 regulations applicable to the Company.  Although the Company believes that its
 expectations with respect to the forward-looking statements are based upon
 reliable assumptions within the bounds of its knowledge of its business and
 operations, there can be no assurance that actual results, performance or
 achievements of the Company will not differ materially from any future
 results, performance or achievements expressed or implied by such forward-
 looking statements.  For more details on factors that could affect
 expectations, see the Company's Annual Report on 10-KSB for the year ended
 December 31, 2000, as filed with the Securities and Exchange Commission.
 
     Guaranty Financial Corporation is the holding company of Guaranty Bank,
 which currently operates nine full-service banking offices in Charlottesville,
 Harrisonburg, Fluvanna County and Henrico County.  With the pending sale of
 the Wellesley branch in Henrico County, the Company has no further plans to
 open or close any additional offices.  At March 31, 2001, Guaranty Financial
 Corporation had total assets of $256.4 million and total deposits of $226.0.
 Equity capital of $15.6 million represents 6.10% of total assets.  Estimated
 total regulatory capital for the holding company at March 31, 2001 was $24.5
 million or 12.39% of total risk weighted assets.  At March 31, 2001 the
 holding company's Tier 1 risk based capital was 10.87% and its leverage ratio
 was 8.60%.  Book value per share was $7.97 at March 31, 2001.
 
 
     Guaranty Financial Corporation
     Financial Highlights
                                                          March 31,
                                                     2001           2000
     Total Assets                                $256,334,000   $273,137,000
     Loans Receivable, Net                       $194,706,000   $220,281,000
     Deposits                                    $225,986,000   $220,754,000
     Stockholders' Equity                         $15,629,000    $14,533,000
     Shares Outstanding                             1,961,727      1,961,727
     Net Book Value Per Share                           $7.97          $7.41
 
     Three Months Ended
     March 31,
                                                       2001           2000
     Net Income                                      $168,000       $244,000
     Weighted Average Shares                        1,961,727      1,961,727
     Loan Loss Provision                             $150,000       $130,000
     Basic & Diluted Earnings Per Share                 $0.09          $0.12
 
 
     Guaranty Bank - Regulatory Capital at March 31, 2001
 
                      Actual        Actual      Amount    Percent     Excess
                      Amount       Percent     Required   Required    Amount
     Tier 1
      Risk
      Based        $22,040,000      11.01%    $8,005,000   4.00%  $14,035,000
     Total Risk
      Based
      Capital      $24,837,000      12.26%   $16,010,000   8.00%   $8,737,000
 
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 SOURCE  Guaranty Financial Corporation