Guaranty Federal Bancshares, Inc. (GFED)
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Federal Bancshares has positioned itself for strong growth by enhancing their management
team and because the local economy has allowed them to take advantage of other banks as
they consolidate and merge
Guaranty Bank is a member of the Privileged Status
ATM network, which provides its customers surcharge free access to over 60 area ATMs and
over 1,000 ATMs nationwide.
Mr. Burke: We are a $430,000,000 commercial bank located in Springfield, Missouri, that is committed to providing exemplary customer service to business and retail customers. We have nine locations and nineteen ATM machines in the Springfield area. As a former savings and loan the bank has a rich history of providing mortgage lending to the area, however, we have successfully transitioned to a true commercial bank with over 54% growth in our commercial portfolio over the past 18-months.
CEOCFOinterviews: Will you tell us about the economy of the area in which you serve and how has it fared over the last few years?
Mr. Burke: We are very fortunate to have a stable economy especially in relation to the region and nation. The five-county area around Springfield is the fastest growing section of Missouri. We have a diversified economy and with a strong service sector. We have a growing and diverse manufacturing base. Other major employers include five universities and two regional hospitals. As a regional hub, retail is a big factor. Bass-Pro Shops world headquarters is located here and Branson is only 25 miles down the road. Our downtown area is undergoing a significant revitalization with over $200 million in new investments, including a new $32 million stadium for the St. Louis Cardinals AA franchise that will relocate here in 2005.
CEOCFOinterviews: What type of customer do you go after?
Mr. Burke: We typically have small to medium sized businesses where we provide the majority of their financing and depository needs. We are heavily weighted in commercial real estate with owner occupied and investment properties. We provide commercial lines of credit, equipment loans and real estate development loans. The individual mortgage client has historically been a major focus as we are one of the top mortgage banks in the area.
CEOCFOinterviews: Are the home and consumer loans focused for your personal banking customers or your commercial customers?
Mr. Burke: The bank was formerly a savings and loan, so we were heavily weighted in the retail sector and personal mortgage loans. We also have many individual investment property loans that would be deemed commercial loans today.
CEOCFOinterviews: Why are people coming to you with their business?
Mr. Burke: We emphasize relationship banking and our personal service is the reason for our significant growth in the commercial area. The big banks continue to consolidate and merge, and that has provided significant opportunity for us in the market. People are going to find experienced and committed banking professionals here that have significant experience in finding financing solutions that match their needs. The one-on-one relationship is something that is going by the wayside even though we are a small community.
CEOCFOinterviews: What services do you offer for your commercial customers that might be different or done differently than in other banks?
Mr. Burke: The delivery of the service is what is going to be different. Services are primarily a commodity and differentiating those from one bank to another is very difficult, but how well you deal with a customer is where your service is going to be better.
CEOCFOinterviews: Are there services that you are not currently offering that you would like to or feel the need for?
Mr. Burke: We are enhancing our business depository and cash management services to augment the continued growth and emphasis we have on the commercial customer. On the retail side we have added several new mortgage products that meet the consumers increasing demands for non-conventional loans.
CEOCFOinterviews: What are the qualities that you look for in the people that represent your bank?
Mr. Burke: We look for people with a high level of integrity, a strong work ethic and the desire to partner up with our clients and work in their best interest. We have focused our efforts on finding proven professionals with a strong ability to provide exemplary customer service. In the last ninety-days we have added two to our senior management team with combined banking service exceeding 55 years. In our mortgage area we have added three proven producers with banking experience over 45 years.
CEOCFOinterviews: Are many of your customers taking advantage of a large variety of services?
Mr. Burke: The majority of our customers do take advantage of all our services. Our full service philosophy allows us to provide for their business and personal needs. Most of them have strong depository relationship with us.
CEOCFOinterviews: How is business at the bank?
Mr. Burke: Business right now is very good. We experienced good growth this year and are up approximately 16% in total assets through nine months. We had record earnings in the third quarter and our stock price is up over 9% year-to-date and has record highs in the last few weeks.
CEOCFOinterviews: Everyone is offering residential mortgages today; why are people coming to your bank?
Mr. Burke: Guaranty Bank has a ninety year history of providing mortgage services to the southwest Missouri area. We are starting with a firm foundation and history and we are refocusing our efforts to regain the position as the top provider of mortgage lending in the area. We have recently added three seasoned professionals from competing organizations to our staff. We have relocated and consolidated our mortgage staff and greatly improved our efficiency. We have expanded our product line and we can serve just about any need that an individual would have. We have a high service level and do a good reputation for meeting customers needs.
CEOCFOinterviews: How will you be prepared for interest rate increase?
Mr. Burke: Our balance sheet is well-positioned for and increase in rates. We have a significant amount of our commercial base in floating rate loans. In addition, we have retained servicing on many of the mortgage loans we have generated, providing consistent fee revenue as the mortgage portfolio turnover slows as rates increase.
CEOCFOinterviews: Do you see acquisitions in the future?
Mr. Burke: That is always a possibility. We would primarily stay in the southwestern Missouri market and maximize our opportunity here. Obviously, we would be willing to look at any opportunities.
CEOCFOinterviews: What about other branches?
Mr. Burke: We currently have a new branch in Springfield underway with opening planned for mid-November. We have a letter of intent to open up a full-service branch approximately ten miles south of Springfield in one of the fastest growing areas in the state of Missouri. We are also attempting to relocate two of our facilities currently located in the Dillons grocery stores in Springfield to free standing full service facilities.
CEOCFOinterviews: Do the in-store locations work well for you?
Mr. Burke: We are relocating out of the in-store branches in an effort to provide better service to the existing clients and allow us to grow in those markets. The new branch that is opening in November is adjacent to an in-store branch and it is designed to provide full service with four drive-in lanes and full service ATM. We have two other in-store branches that we will be relocating as well. One of them is across the parking lot from our main banking facility, and one is in the downtown area that is undergoing substantial revitalization. We are aggressively looking for a full service facility there as well.
CEOCFOinterviews: Why should investors be interested?
Mr. Burke: We have positioned the organization to do great things. We have made a concerted effort in the last year to enhance our management team and to focus on growing the commercial and mortgage areas of the bank. Our strong local economy has allowed us to take advantage of other banks as they consolidate and merge.
CEOCFOinterviews: What should investors know about Guaranty that perhaps they do not realize when they first look at the company?
Mr. Burke: I think potential investors probably do not realize the successful transition the bank has made from a savings and loan to a full service commercial bank. The new management team brings many many years of proven leadership and experience. We have hired people with significant experience and expertise in commercial banking and have a renewed focus in the mortgage area. The bank has grown significantly in the last year and is gaining market share.
CEOCFOinterviews: You have paid dividends for quite some time; will you tell us more about that?
Mr. Burke: We have consistently paid dividends since going public in 1995. The company paid semi annual dividends up until 2002 and then we switched over to quarterly dividends. We have increased those every year for five or six years.
CEOCFOinterviews: Mr. Burke, in closing, as president of the bank, what keeps you busy throughout the day?
Mr. Burke: I am working with our staff to communicate the visions that I have for the organization, which is centered on providing consistent professional customer service. As we continue to grow the organization, we will focus on developing competitive products, convenient locations, and committed employees. As a lender for many years, I also enjoy spending a considerable amount of time with our commercial borrowers generating business and referrals.
Guaranty Bank has a ninety year history of providing mortgage services to the southwest Missouri area. We are starting with a firm foundation and history and we are refocusing our efforts to regain the position as the top provider of mortgage lending in the area. We have recently added three seasoned professionals from competing organizations to our staff. We have relocated and consolidated our mortgage staff and greatly improved our efficiency. We have expanded our product line and we can serve just about any need that an individual would have. We have a high service level and do a good reputation for meeting customers needs. - Shaun Burke
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