 SPRINGFIELD, Mo., July 23, 2020 GLOBE NEWSWIRE -- CEO CommentsThe second quarter of 2020 continues to be an attempt to evaluate the full impact of COVID-19 on many fronts. Economically, an unprecedented amount of government stimulus to support employees, businesses and credit markets was quickly implemented to lessen the financial toll that COVID-19 was expected to inflict on many. The logistics to get support to those needing it will be debated over time, but the overall premise to quickly gird the economy appears to be achieved, for now. With so much uncertainty, the question remains of how much will this impact the individuals, businesses and communities we know and work with? The answers will eventually come, but until then, we are doing our part to maintain stability in the areas that Guaranty Bank can make a difference. For us, that means providing assistance to our customers that are in need of help, generating 650 small business loans to support local payrolls, utilizing technology to conduct business in a socially distant format that still gives our valued customers a first-class customer service experience and, as we have for over a century, offering FDIC insured deposit products to eliminate the worry about where to keep your funds during these times. Turning to financial results for our second quarter, we posted solid results with net income of 1.88 million leading to diluted earnings per share of 0.43 compared to 0.54 from the prior year quarter. This quarter included 750,000 in additional funding of the allowance for loan loss reserves as a precautionary measure. We anticipate further loan deferment and payment delays as economic impacts related to COVID-19 continue to affect segments of our borrowers. Interest rate cuts made by the Federal Reserve in March of this year continue to lower asset yields and costs of funds this quarter while spurring increased refinance activity in our loan portfolio. These actions are proving to be a slight net positive in the short-term for the Bank, however, with increased amounts of government intervention to support economies, we anticipate net interest margin compression to continue to be a theme as the current low interest rate environment persists. Bank capital remains strong and above any regulatory guidelines allowing for dividends for our shareholders and a means to offset potential loan losses should they rise in future periods. Measured growth based on conservative practices in this ever-changing business environment will continue to be our focus as we support our employees, customers, shareholders and communities during this time. - Shaun A. Burke, President and Chief Executive OfficerCOVID-19 Response Items Participation in the SBA Payroll Protection Program PPP, a government stimulus program formulated under the CARES Act that began in April 2020. To date, we have approved and funded 650 PPP requests for 55.2 million to support over 8,300 local jobs. Anticipated income from PPP loans to be included in earnings over the life of this program is estimated to be 2.2 million. Ongoing efforts to support borrowers to temporarily modify loan agreements andor defer payments to navigate the current economic downturn. Financial Condition June 30, 2020 versus December 31, 2019 Total assets increased 116.4 million 12 to 1.13 billion. Total gross loans increased 59.4 million 8 to 790.5 million. Total deposits increased 109.5 million 13 to 931.0 million. The loan to deposit ratio as of June 30, 2020 was 84.92 compared to 89.01 as of December 31, 2019. Stockholders equity increased by 1.1 million 1.Select Quarterly Financial DataBelow are selected financial results for the Companys second quarter of 2020, compared to the first quarter of 2020 and the second quarter of 2019. Quarter ended June 30, 2020 March 31, 2020 June 30, 2019 Dollar amounts in thousands, except per share data Net income available to common shareholders1,883 2,105 2,429 Diluted income per common share0.43 0.49 0.54 Common shares outstanding 4,337,615 4,337,115 4,442,216 Average common shares outstanding , diluted 4,340,751 4,336,302 4,503,964 Annualized return on average assets 0.70 0.82 1.00 Annualized return on average common equity 8.91 9.84 11.62 Net interest margin 3.19 3.24 3.49 Efficiency ratio 70.18 69.29 69.77 Common equity to assets ratio 7.60 8.15 8.57 Tangible common equity to tangible assets 7.30 7.81 8.17 Book value per common share19.78 19.31 18.85 Tangible book value per common share18.92 18.43 17.91 Nonperforming assets to total assets 1.06 1.17 1.28 The following were items impacting the second quarter operating results as compared to the same quarter in 2019 and the financial condition results compared to December 31, 2019: Interest income Total interest income decreased 1.1 million 10 during the quarter. The decrease is primarily due to declining interest rates on earning assets and our asset mix having greater percentages of cash and investment holdings rather than loans when compared to prior periods. The average balance of total interest-earning assets increased 109.2 million 12 while the yield on average interest earning assets decreased 99 basis points to 4.04. During the quarter, 55.2 million of PPP loans were originated contributing to the strong increase in earning assets, but negatively impacting the overall yield on interest-earning assets. Compared to the second quarter of 2019, the average balance of the loan portfolio increased 4.3 million and the average loan yield decreased by 69 basis points to 4.74. Loan accretion income recognized from the Hometown Bancshares acquisition in 2018 was 169,000 during the quarter compared to 452,000 in the same quarter of 2019. Partially offsetting this anticipated decline in accretion income was 197,000 of loan fees recognized from the origination of PPP loans previously mentioned. Interest expense - Total interest expense decreased 1.3 million 38 during the quarter. The decrease is primarily driven by lower costs on all interest-bearing deposits and borrowings in the current low-rate environment. The average balance of interest-bearing liabilities increased 61.3 million 8, while the average cost of interest-bearing liabilities decreased 76 basis points to 1.03. Cuts to key interest rates by the Federal Reserve have caused significant reductions across the yield curve in 2020, however, pricing strategies by other institutions in our markets will continue to create competitive pressures on deposit rates. 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. See the Analysis of Net Interest Income and Margin table below for the second quarter.Asset Quality, Provision for Loan Loss Expense and Allowance for Loan Losses The Companys nonperforming assets increased to 12.0 million 9 as of June 30, 2020, compared to 11.0 million as of December 31, 2019.Based on its reserve analysis and methodology, the Company recorded 750,000 in provision for loan loss expenses during the quarter compared to 100,000 recorded during the prior year quarter. The decision to expense this amount was due to segments of our loan portfolio experiencing weakness as a result of COVID-19 virus related economic slowdowns and travel restrictions. At June 30, 2020, the allowance for loan losses of 8.8 million was 1.11 of gross loans outstanding excluding mortgage loans held for sale, an increase from the 1.04 reserved as of December 31, 2019.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 580,000 as of June 30, 2020.Management believes the allowance for loan losses is at a sufficient level to provide for loan losses in the Banks existing loan portfolio.Non-interest Income Noninterest income increased 380,000 20 during the quarter compared to the same quarter in 2019. This was primarily due to income of 381,000 100 recognized from a new loan swap product that debuted earlier in 2020, increased income from the sale of mortgage loans of 321,000 57 and an increase in realized gains from the sale of investment securities of 56,000 71. Offsetting these items was a decrease of income from the sale of SBA loans of 247,000 100 due to none of these loans being sold during the quarter, increased costs on foreclosed properties of 114,000 285 and reduced service charge income of 105,000 25 due to lower volume of fee-based transactions.Non-interest Expense Non-interest expenses increased 428,000 6 when compared to the same quarter in 2019. This increase was made up of several items with the following being the largest contributors: Salaries and employee benefit expenses increased 186,000 5 compared to the same quarter in 2019 primarily due to the hiring of new commercial relationship managers and increased commissions and incentives related to strong mortgage lending activity. Data processing expenses increased 157,000 37 for the quarter due when compared to the prior year due to 2020 having a full quarter of expenses related to upgrades made to our core processing system in last half of 2019. 