UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended March 31, 1999
--------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission number 0-23325
-------
Guaranty Federal Bancshares, Inc.
---------------------------------
(Exact name of registrant as specified in its charter)
Delaware 43-1792717
- -------- ----------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1341 West Battlefield
Springfield, Missouri 65807
- ---------------------------------------- ----------------
(Address of principal executive offices) (Zip Code)
Telephone Number: (417) 889-2494
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities Exchange act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.
Class Outstanding at May 14, 1999
- ----- ---------------------------
Common Stock, Par Value $0.10 5,638,648 Shares
<PAGE>
GUARANTY FEDERAL BANCSHARES, INC.
Form 10-Q
TABLE OF CONTENTS
Item Page
- ---- ----
PART I. Financial Information
-----------------------------
1. Consolidated Financial Statements (Unaudited)
Statements of Financial Condition 3
Statements of Income 4
Statements of Changes in Stockholders' Equity 5
Statements of Cash Flow 7
Notes to Consolidated Financial Statements 8
2. Management's Discussion and Analysis of Financial Condition and 11
Results of Operations
3. Quantitative and Qualitative Disclosures about Market Risk 20
PART II. Other Information
--------------------------
1. Legal Proceedings 24
2. Changes in Securities and Use of Proceeds 24
3. Defaults Upon Senior Securities 24
4. Submission of Matters to Vote of Security-holders 24
5. Other Information 25
6. Exhibits and Reports on Form 8-K 25
Signatures 26
2
<PAGE>
PART I
Item 1. Financial Statements
--------------------
GUARANTY FEDERAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
March 31, 1999 (UNAUDITED) AND JUNE 30, 1998
ASSETS
------
<TABLE>
<CAPTION>
March 31, June 30,
1999 1998
------------- -------------
(Unaudited)
<S> <C> <C>
Cash $ 1,245,430 846,691
Interest-bearing deposits in other financial institutions 6,457,317 6,458,232
------------- -------------
Cash and cash equivalents 7,702,747 7,304,923
Available-for-sale securities 6,193,832 4,765,021
Held-to-maturity securities 7,529,958 8,922,389
Mortgage-backed securities, held-to-maturity 4,424,109 11,948,654
Mortgage-backed securities, available-for-sale 8,772,108 9,055,658
Mortgage loans held for sale 1,444,598 805,183
Loans receivable, net 245,407,643 205,414,561
Accrued interest receivable
Loans 1,329,861 1,188,162
Investments 135,758 252,865
Mortgage-backed securities 105,860 163,117
Prepaid expenses and other assets 4,964,158 2,503,055
Foreclosed assets held for sale 2,500 286,000
Premises and equipment 7,436,113 7,432,971
------------- -------------
$ 295,449,245 260,042,559
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
LIABILITIES
Deposits $ 137,305,983 140,975,336
Federal Home Loan Bank advances 90,228,371 45,081,028
Advances from borrowers for taxes and insurance 789,938 870,476
Accrued expenses and other liabilities 1,428,229 513,943
Accrued interest payable 500,504 256,975
Income taxes payable 501,670
417,532
Deferred income taxes 1,491,911 1,237,171
------------- -------------
Total Liabilities 232,246,606 189,352,461
------------- -------------
STOCKHOLDERS' EQUITY
Capital Stock
Common stock, $0.10 par value; authorized 10,000,000 shares;
issued 6,242,888 shares - March 31;
6,228,035 shares - June 30 624,289 622,804
Additional paid-in capital 47,215,113 49,016,992
Unearned ESOP shares (3,157,490) (3,444,540)
Retained earnings, substantially restricted` 22,320,036 21,682,950
Accumulated other comprehensive income
Unrealized appreciation on available-for-sale securities,
net of income taxes of $1,992,692 and $1,651,429
at March 31, 1999 and June 30, 1998, respectively 3,392,962 2,811,892
------------- -------------
70,394,910 70,690,098
Treasury stock, at cost, - 559,340 shares (7,192,271) --
------------- -------------
Total Stockholders' Equity 63,202,639 70,690,098
------------- -------------
$ 295,449,245 260,042,559
============= =============
</TABLE>
See Notes to Consolidated Financial Statements
3
<PAGE>
GUARANTY FEDERAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME
THREE AND NINE MONTHS ENDED MARCH 31, 1999 AND 1998(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ending Nine Months Ending
------------------- ------------------
3/31/99 3/31/98 3/31/99 3/31/98
------- ------- ------- -------
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans $ 4,689,386 3,696,895 13,663,415 10,794,484
Investment securities 151,586 95,928 359,567 289,221
Mortgage-backed securities 264,899 242,033 931,494 807,373
Other 139,829 348,943 408,104 642,517
----------- ------------ ----------- ------------
Total Interest Income 5,245,700 4,383,799 15,362,580 12,533,595
----------- ----------- ----------- ----------
INTEREST EXPENSE
Deposits 1,433,321 1,688,787 4,535,589 5,296,373
Federal Home Loan Bank advances 1,239,382 339,326 3,328,994 1,159,344
Other borrowed funds -- -- -- 79,043
----------- ---------- --------- ----------
Total Interest Expense 2,672,703 2,028,113 7,864,583 6,534,760
----------- ---------- --------- ----------
Net Interest Income 2,572,997 2,355,686 7,497,997 5,998,835
Provision for Loan Losses 45,000 30,000 135,000 93,352
----------- ---------- --------- ----------
Net Interest Income after
Provision for Loan Losses 2,527,997 2,325,686 7,362,997 5,905,483
---------- ---------- --------- ---------
NONINTEREST INCOME (LOSS)
Service charges 199,084 150,430 626,236 425,055
Late charges and other fees 32,570 28,224 83,867 81,710
Gain on loans, investment
securities and mortgage-backed securities 8,535 12,295 47,238 69,666
Income (expense) on foreclosed assets (4,291) 8,525 (11,281) 10,611
Other income 34,884 53,001 99,050 116,071
Total Noninterest Income 270,782 252,475 845,110 703,113
---------- ---------- --------- ---------
NONINTEREST EXPENSE
Salaries and employee benefits 802,633 587,781 2,287,793 1,658,897
Occupancy 205,476 202,054 577,981 550,917
SAIF deposit insurance premiums 20,783 23,164 63,859 70,116
Data processing fees 132,873 105,547 377,290 302,849
Advertising 107,916 108,300 332,767 297,046
Other expense 246,927 218,634 791,818 624,834
---------- ---------- --------- ---------
Total Noninterest Expense 1,516,608 1,245,480 4,431,508 3,504,659
---------- ---------- --------- ---------
Income before Income Taxes 1,282,171 1,332,681 3,776,599 3,103,937
Provision for Income Taxes 458,548 489,438 1,334,444 1,149,403
----------- ---------- --------- ---------
NET INCOME 823,623 843,243 2,442,155 1,954,534
OTHER COMPREHENSIVE INCOME
Unrealized appreciation (depreciation)
on available-for-sale securities (451,431) 331,504 581,070 786,945
----------- ---------- --------- ---------
COMPREHENSIVE INCOME $ 372,192 1,174,747 3,023,225 2,741,479
=========== =========== ========= =========
BASIC EARNINGS PER SHARE $ .15 .14 .44 n/a
=========== =========== ========= =========
DILUTED EARNINGS PER SHARE $ .15 .14 .43 n/a
=========== =========== ========= =========
</TABLE>
See Notes to Consolidated Financial Statements
4
<PAGE>
GUARANTY FEDERAL BANCSHARES, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
NINE MONTHS ENDED MARCH 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
Accumulated
Other
Comprehensive
Income
---------------
Unrealized
Appreciation
Additional Unearned on Available-
Common Paid-In ESOP for-Sale Retained Treasury
Stock Capital Shares Securities, Net Earnings Stock Total
----- ------- ------ --------------- -------- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, June 30, 1998 $ 622,804 49,016,992 (3,444,540) 2,811,892 21,682,950 -- 70,690,098
Net Income -- -- -- -- 2,442,155 -- 2,442,155
Dividends on common stock,
($0.34 per share) -- -- -- -- (1,805,069) -- (1,805,069)
Dividends on RRP stock -- 7,500 -- -- -- -- 7,500
Recognition and Retention Plan
(RRP) expense & Restricted Stock
Plan (RSP) expense -- 389,338 -- -- -- -- 389,338
Stock options exercised 1,485 87,930 -- -- -- -- 89,415
RSP stock purchased -- (2,373,065) -- -- -- -- (2,373,065)
Treasury stock purchased -- -- -- -- -- (7,192,271) (7,192,271)
Release of ESOP shares -- 62,864 287,050 -- -- -- 349,914
Tax benefit of RRP/RSP shares -- 23,554 -- -- -- -- 23,554
Change in unrealized appreciation on
available-for-sale securities, net of
income taxes of $341,263 -- -- -- 581,070 -- -- 581,070
--------- ---------- ----------- ----------- ----------- ---------- -----------
Balance, March 31, 1999 $ 624,289 47,215,113 (3,157,490) 3,392,962 22,320,036 (7,192,271) 63,202,639
========= ========== =========== =========== =========== ========== ===========
</TABLE>
See Notes to Consolidated Financial Statements
5
<PAGE>
GUARANTY FEDERAL BANCSHARES, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
NINE MONTHS ENDED MARCH 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
Accumulated
Other
Comprehensive
Income
---------------
Unrealized
Appreciation
Additional Unearned on Available-
Common Paid-In ESOP Retained for-Sale
Stock Capital Shares Earnings Securities, Net Total
----- ------- ------ -------- --------------- -----
<S> <C> <C> <C> <C> <C> <C>
Balance, June 30, 1997 $3,125,000 3,687,356 -- 18,620,219 2,057,580 27,490,155
Net Income -- -- -- 1,954,534 -- 1,954,534
Dividends on common stock,
($0.22 per share on 3,125,000 shares
and $.15 per share on 6,225,610 shares) -- -- -- (1,621,372) -- (1,621,372)
Dividends on RRP stock -- 8,704 -- -- -- 8,704
Recognition and Retention Plan
(RRP) expense -- 74,470 -- -- -- 74,470
Stock options exercised 450 43,922 -- -- -- 44,372
Transfer from MHC -- -- -- 1,842,982 -- 1,842,982
Stock redeemed and stock issued under
plan of conversion to stock
ownership, net (2,502,868) 43,130,922 (3,444,540) -- -- 39,183,514
Tax benefit of RRP/RSP shares -- 32,229 -- -- -- 32,229
Change in unrealized appreciation on
available-for-sale securities, net of
income taxes of $462,174 -- -- -- -- 786,945 786,945
---------- ---------- ---------- ---------- --------- -----------
Balance, March 31, 1998 $ 622,582 48,977,603 (3,444,540) 20,796,363 2,844,525 69,796,533
========== =========== =========== ========== ========= ===========
</TABLE>
See Notes to Consolidated Financial Statements
6
<PAGE>
GUARANTY FEDERAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED MARCH 31, 1999 AND 1998(UNAUDITED)
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 2,442,155 1,954,534
Items not requiring (providing) cash:
Deferred income taxes (86,523) 51,504
Depreciation 315,209 331,393
Provision for loan losses 135,000 93,352
Gain on loans, investment securities
and mortgage-backed securities (47,238) (69,666)
Loss on sale of foreclosed assets 3,295 --
Amortization of deferred income, premiums and discounts 66,695 79,965
RRP/ RSP expense 389,338 74,470
Origination of loans held for sale (8,213,377) (5,686,116)
Proceeds from sale of loans held for sale 7,621,200 5,743,616
Changes in:
Accrued interest receivable 32,665 (81,792)
Prepaid expenses and other assets (203,703) (81,657)
Accounts payable and accrued expenses 192,645 1,095,043
Income taxes payable 107,692 194,626
----------- -----------
Net cash provided by operating activities 2,755,053 3,699,272
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Net increase in loans (40,182,514) (32,420,629)
Principal payments on mortgage-backed securities,
available-for-sale 4,585,363 --
Principal payments on mortgage-backed securities,
held-to-maturity 3,217,266 2,925,359
Purchase of premises and equipment (318,351) (317,833)
Purchase of available-for-sale securities (501,561) --
Purchase of held-to-maturity securities -- (4,855,431)
Proceeds from maturities or calls of
held-to-maturity investments 1,330,235 4,259,673
Purchase of FHLB stock (2,257,400)
Proceeds from sale of foreclosed assets 330,641 14,000
Capitalized costs on foreclosed assets 46 --
----------- -----------
Net cash used in investing activities (33,796,275) (30,394,861)
------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of common stock, net -- 42,628,054
Unearned ESOP shares 349,914 (3,444,540)
Stock options exercised 89,415 44,372
Cash dividends paid (839,899) (1,621,372)
Cash dividends received on RRP stock 7,500 8,704
Net increase in demand deposits,
NOW accounts and savings accounts 6,493,972 8,044,921
Net decrease in certificates of deposit (10,163,325) (14,345,968)
Proceeds from FHLB advances 49,092,500 43,750,000
Repayments of FHLB advances (3,945,157) (34,039,638)
Advances from borrowers for taxes and insurance (80,538) (128,803)
RSP stock purchased (2,373,065) --
Treasury stock purchased (7,192,271) --
----------- -----------
Net cash provided by financing activities 31,439,046 40,895,730
----------- -----------
INCREASE IN CASH AND CASH EQUIVALENTS 397,824 14,200,141
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 7,304,923 3,817,351
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 7,702,747 18,017,492
========== ===========
</TABLE>
See Notes to Consolidated Financial Statements
7
<PAGE>
GUARANTY FEDERAL BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1: Conversion, Reorganization and Stock Issuance
---------------------------------------------
On December 30, 1997, Guaranty Federal Bancshares, Inc. completed the
conversion from a federally chartered mutual holding company, (formerly Guaranty
Federal Bancshares, M. H. C.) to a Delaware-chartered stock corporation.
Stockholders' equity increased to $69.5 million primarily due to the conversion
in which Guaranty Federal Bancshares, Inc. exchanged 1,880,710 shares of its
common stock for all the Bank's common stock not held by Guaranty Federal
Bancshares, M. H. C. This exchange ratio was 1.931. In addition 4,340,812 shares
at $10.00 per share were sold in the stock offering, including 344,454 shares to
the employee stock ownership plan ( the "ESOP"). Total shares of common stock
outstanding following the offering and exchange was 6,221,522.
In April 1995 Guaranty Federal Savings and Loan Association (the
"Association") reorganized from a federally chartered mutual savings and loan
association into a federal mutual holding company, Guaranty Federal Bancshares,
M. H. C. (the "MHC"). As part of the reorganization, the Association
incorporated a de novo federally chartered stock savings bank, Guaranty Federal
Savings Bank (the "Bank") and transferred most of its assets and all its
liabilities to the Bank. The Bank issued 3,125,000 shares of its common stock
(par value $1.00) of which 972,365 shares were sold to parties other than the
MHC, thus creating a minority ownership interest in the Bank. The shares had an
initial public offering price of $8 per share, resulting in gross sales proceeds
of $7,778,920. Costs related to the stock issuance of $654,388 were applied to
reduce the gross proceeds. Also $100,000 was transferred to the MHC for the
initial capitalization in connection with reorganization.
Note 2: Basis of Presentation
---------------------
The accompanying unaudited interim consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Rule
10-01 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
only of normal recurring accruals) considered necessary for a fair presentation
have been included.
8
<PAGE>
GUARANTY FEDERAL BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 2: Basis of Presentation, continued
--------------------------------
Operating results for the three-month and nine-month periods ended March
31, 1999 and 1998, are not necessarily indicative of the results that may be
expected for the full year. The Company engaged in no significant business
activity other than formation activities prior to December 30, 1997. Between
December 30, 1997 and March 31, 1999, the company engaged in no significant
business activity other than ownership of the common stock of the Bank.
Accordingly, all consolidated financial statements for periods prior to December
30, 1997, relate solely to the Bank and Guaranty Financial Services, Inc. of
Springfield, a wholly owned subsidiary of the Bank.
Note 3: Principles of Consolidation
---------------------------
As more fully described in Note 1, the Company is a Delaware-chartered
stock corporation organized to facilitate the conversion from the mutual holding
company form of ownership of the Bank to the stock holding company form of
ownership of the Bank and hold all of the capital stock of the Bank. In
connection with the conversion, Guaranty Federal Bancshares, M. H. C., which had
owned 69% of the common stock of the Bank, was merged with and into the Bank,
and its shares of the Bank were canceled.
The consolidated financial statements include the accounts of the Company,
its wholly -owned subsidiary, Guaranty Federal Savings Bank and the wholly-owned
subsidiary of the Bank, Guaranty Financial Services of Springfield, Inc.
Significant intercompany accounts and transactions have been eliminated in
consolidation.
Note 4: Earnings Per Share
------------------
As more fully described in the preceding Notes, the Company had no
operations prior to December 30, 1997 and earnings per share information for the
common stock of the Company for the nine months ended March 31, 1998 has not
been presented because the information is not available or would not be
meaningful.
9
<PAGE>
GUARANTY FEDERAL BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 4: Earnings Per Share, continued
-----------------------------
<TABLE>
<CAPTION>
Three months ended Nine months ended
March 31, 1999 March 31, 1999
---------------------------- ---------------------------------
Income Shares Per-share Income Shares Per-Share
<S> <C> <C> <C> <C> <C> <C>
Basic EPS
Income available to common stockholders $823,623 5,459,586 $0.15 $2,442,155 5,572,849 $0.44
===== =====
Effect of Dilutive Securities
Stock Options 59,808 60,618
--------- ---------
Income available to common stockholders $823,623 5,519,394 $0.15 $2,442,155 5,633,467 $0.43
======== ========= ===== ========== ========= =====
</TABLE>
Options to purchase 5,000 shares and 436,347 shares of common stock at
$12.63 per share and $13.44 per share, respectively were outstanding during the
three months and nine months ended March 31, 1999, but were not included in the
computation of diluted EPS because the options' exercise price was greater than
the average market price of the common shares.
Note 5: Benefit Plans
-------------
On October 18, 1995, the Bank's stockholders voted to approve both a
Recognition and Retention Plan ("RRP") and a Stock Option Plan ("SOP"). On July
22, 1998, the Company's stockholders voted to approve the 1998 Restricted Stock
Plan (" RSP") and 1998 Stock Option Plan ("1998 SOP"). The RRP and RSP
authorized shares to be issued to directors, officers and employees of the Bank.
As of March 31, 1999, all of the RRP and RSP shares have been purchased and all
except 9,338 shares have been awarded. The Bank is amortizing the RRP and RSP
expense over each participant's vesting period and the financial statements
reflect RRP and RSP expense of $389,338 and $74,470 for the nine month periods
ended March 31, 1999 and 1998, respectively. The SOP and 1998 SOP authorized
stock options on shares to be issued to officers and employees of the Bank. As
of March 31, 1999, all options except those on 34,439 shares have been granted.
The RRP, RSP, SOP and 1998 SOP vest over a five year period. The RRP and SOP
have been adjusted to reflect the conversion, reorganization and stock issuance
described in Note 1 with all vesting periods remaining unchanged. At March 31,
1998, there were 562,759 unexercised options that have been granted at prices
ranging from $5.83 to $13.44 per share and 200,351 RRP and RSP shares were
unvested.
Note 6: New Accounting Pronouncements
-----------------------------
During the quarter ending September 30, 1998, the Company adopted SFAS 130,
"Reporting Comprehensive Income." This Statement establishes standards for
reporting and display of comprehensive income and its components in a set of
financial statements.
10
<PAGE>
GUARANTY FEDERAL BANCSHARES, INC.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
-----------------------------------------------------------------------
of Operations
-------------
General
- -------
The accompanying Consolidated Financial Statements include the accounts of
Guaranty Federal Bancshares, Inc. (the "Company"), and all accounts of its
wholly owned subsidiary, Guaranty Federal Savings Bank (the "Bank") and all
accounts of the wholly-owned subsidiary of the Bank, Guaranty Financial Services
of Springfield, Inc. All significant intercompany transactions and balances have
been eliminated in consolidation.
However, because the conversion, reorganization and stock issuance of the
Company, the Bank and related entities did not occur until December 30, 1997,
all results prior to that date reflect the accounts of the Bank and its
subsidiary. The Company realized approximately $39.2 million in net proceeds
from the stock issuance of which the Company provided $19.9 million to the Bank
as capital and the Company provided a loan of $3.44 million to fund the purchase
of stock for the employee stock ownership plan. Other than the loan for the
ESOP, most of the funds received have been invested in loans.
The primary function of the Company has been to monitor its investment in
the Bank, as a result, the results of operation of the Company are derived
primarily from operations of the Bank. The Bank's results of operations are
primarily dependent on net interest margin, which is the difference between
interest income on interest-earning assets and interest expense on
interest-bearing liabilities. The Bank's income is also affected by the level of
its noninterest expenses, such as employee salary and benefits, occupancy
expenses and other expenses. The following discussion reviews the financial
condition at March 31, 1999, and the results of operations for the three and
nine months ended March 31, 1999 and 1998.
The discussion set forth below, as well as other portions of this Form
10-Q, may contain forward-looking comments. Such comments are based upon the
information currently available to management of the Company and management's
perception thereof as of the date of the Form 10-Q. Actual results of the
Company's operations could materially differ from those forward-looking
comments. The differences could be caused by a number of factors or combination
of factors including, but limited to; changes in demand for banking services;
changes in portfolio composition; changes in management strategy; increased
competition from both bank and non-bank companies; and the ability to discover
and correct potential Year 2000 problem, which is discussed later.
11
<PAGE>
GUARANTY FEDERAL BANCSHARES, INC.
Financial Condition
- -------------------
The Bank's total assets increased $35,406,686, or 13.6%, from $260,042,559
as of June 30, 1998, to $295,449,245 as of March 31, 1999.
Cash and cash equivalents increased $397,824, or 5.4% from $7,304,923 as of
June 30, 1998, to $7,702,747 as of March 31, 1999.
Securities available-for-sale increased $1,428,811, or 30.0% from
$4,765,021 as of June 30, 1998, to $6,193,832 as of March 31, 1999, this is
primarily due to the increase in value of Federal Home Loan Corporation
("FHLMC") stock. The Bank continues to hold 96,000 shares of FHLMC stock with a
amortized cost of $94,000 in the available-for-sale category. As of March 31,
1999, the gross unrealized gain on the stock was $5,390,000 an increase from
$4,424,000 as of June 30, 1998. Securities held-to-maturity decreased due to
principal repayments, by $1,392,431, or 15.6%, from $8,922,389 as of June 30,
1998 to $7,529,958 as of March 31, 1999.
Mortgage-backed securities, held-to-maturity, decreased $7,524,545, or
63.0%, from $11,948,654 as of June 30, 1998, to $4,424,109, as of March 31,
1999. The decrease is attributable to prepayments received on various pools of
mortgage-backed securities during the nine months ending March 31, 1999.
Mortgage-backed securities, available-for-sale, decreased $283,550, or 3.1% from
$9,055,658 as if June 30, 1998, to $8,772,108 of March 31, 1998. The decrease is
attributable to a decrease in the market value of these securities during this
period, as well as prepayments.
Net loans receivable increased by $39,993,082, or 19.5%, from $205,414,561,
as of June 30, 1998, to $245,407,643, as of March 31, 1999, and loans
held-for-sale increased by $639,415, or 79.4%, from $805,183 as of June 30, 1998
to $1,444,598 as of March 31, 1999. Growth consisted primarily of loans secured
by both owner and non-owner occupied residential real estate, which increased by
$32,326,000. Growth in loans receivable is anticipated to continue and
represents a major part of the Bank's planned assets growth.
Allowance for loan losses increased $147,852 or 6.7% from $2,191,557 as of
June 30, 1998, to $2,339,409 as of March 31, 1999. The allowance increased due
to an increase in the provision for loan losses, as well as experiencing
recoveries in excess of charge-offs for the period. The allowance for loan
losses as of March 31, 1999 and June 30, 1998 was 0.9%, and 1.1% respectively,
of net loans outstanding. As of March 31, 1999, the allowance for loan losses
was 228.2% of nonperforming loans versus 216.6% as of June 30, 1998.
12
<PAGE>
GUARANTY FEDERAL BANCSHARES, INC.
Financial Condition, continued
- ------------------------------
Fair value of foreclosed assets held-for-sale decreased $283,500 or 99.1%
from $286,000 as of June 30, 1998, to $2,500 as of March 31, 1999. This decrease
is due to the sale of all foreclosed assets held with the exception of one
vehicle.
Premises and equipment increased $3,142, or 0.1%, from $7,432,971 as of
June 30, 1998, to $7,436,113 as of March 31, 1999. The Bank opened a new
"in-store" branch in a Walmart Super Center, located in Nixa, Missouri, in
January 1999. The increase in premises and equipment was primarily due to cost
of establishing this branch net of depreciation.
Deposits decreased $3,669,353, or 2.6%, from $140,975,336 as of June 30,
1998, to $137,305,983 as of March 31, 1999. For the nine months ending March 31,
1999, checking and passbook accounts increased by $6,493,972, or 17.6%, while
certificates of deposits decreased by $10,163,325, or 9.8%. The majority of this
increase in checking and passbook accounts can be attributed to an aggressive
marketing campaign initiated in early 1997 designed to attract checking deposit
customers, as well as the opening of a new "in-store" branch located in the
Walmart Super Center in Nixa, Mo. The decrease in certificates of deposit can be
attributed to management's decision to allow high cost certificates of deposit
accounts to run off and replace these funds with FHLB advances at an overall
lower marginal cost.
As a result of the decrease in deposits, and the continued increase in loan
demand, FHLB advances increased $45,147,343 or 100.1%, from $45,081,028 as of
June 30, 1998, to $90,228,371 as of March 31, 1999. As of March 31, 1999, the
Bank had the ability to borrow an additional $66.0 million from the FHLB.
Accrued expenses and other liabilities increased $914,286 or 177.9% from
$513,943 as of June 30, 1998, to $1,428,229 as of March 31, 1999. The majority
of this increase is due to a $0.18 per share dividend payable to stockholders of
record March 31, 1999, totaling $965,170.
Stockholders' equity (including unrealized appreciation on securities
available-for-sale, net of tax) decreased $7,487,459, or 10.6%, from $70,690,098
as of June 30, 1998, to $63,202,639 as of March 31, 1999. This decrease was due
to several factors. In connection with the RSP, $2,373,065 was contributed to
purchase 173,632 shares of Company stock, which was accounted for as a reduction
of stockholders' equity. In addition, a total of 559,340 shares of treasury
stock were purchased in the open market at a cost of $7,192,271. Finally,
semi-annual dividends in the amount of $1,805,069 ($0.16 and $0.18 per share,
respectively) were declared and/or paid. On a per share basis, stockholders'
equity decreased from $12.01 as of June 30, 1998 to $11.77 as of March 31, 1999.
13
<PAGE>
GUARANTY FEDERAL BANCSHARES, INC.
Analysis of core earnings
- -------------------------
The Company's profitability is primarily dependent upon net interest
income, which represents the difference between interest and fees earned on
loans, MBSs and debt and equity securities, and the cost of deposits and
borrowings. Net interest income is dependent on the difference between the
average balances and rates earned on interest-earning assets and the average
balances and rates paid on interest-bearing liabilities. Net income is further
affected by non-interest income, non-interest expense and income taxes.
The following table sets forth certain information relating to the Company's
average consolidated statements of financial condition and reflects the average
yield on assets and average cost of liabilities for the periods indicated. Such
yields and costs are derived by dividing income or expense annualized by the
average balance of assets or liabilities, respectively, for the periods shown.
Average balances were derived from average daily balances. The average balance
of loans includes loans on which the Company has discontinued accruing interest.
The yields and costs include fees which are considered adjustments to yields.
<TABLE>
<CAPTION>
Nine months ended Nine months ended
March 31, 1999 March 31, 1998
-------------- --------------
Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost
------- -------- ---- ------- -------- ----
(In Thousands) (In Thousands)
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Interest-earning:
Loans $228,377 $13,663 7.98% $170,199 $10,794 8.46%
Investment securities 8,179 360 5.87% 6,512 289 5.92%
Mortgage-backed securities 18,274 931 6.79% 14,442 807 7.45%
Other assets 13,844 408 3.93% 17,663 643 4.85%
-------- ------ ----- ------- ------ -----
Total interest-earning 268,674 15,362 7.62% 208,816 12,533 8.00%
Noninterest-earning 7,650 6,993
-------- -------
$276,324 $215,809
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing:
Savings accounts $8,414 157 2.49% $8,796 183 2.77%
Transaction accounts 27,743 570 2.74% 21,037 455 2.88%
Certificates of deposit 95,927 3,808 5.29% 112,503 4,658 5.52%
FHLB advances 74,627 3,329 5.95% 25,282 1,159 6.11%
Other borrowed funds -- -- -- 3,859 79 2.73%
-------- ------ ------- ------- ------ ------
Total interest-bearing 206,711 7,864 5.07% 171,477 6,534 5.08%
Noninterest-bearing 3,741 2,400
-------- -------
Total liabilities 210,452 173,877
Stockholders' equity 65,872 41,932
-------- -------
$276,324 $215,809
======= ========
Net earning balance $ 61,963 $ 37,339
======== ========
Earning yield less costing rate 2.55% 2.92%
Net interest income, and
net yield spread on
interest earning assets $7,498 3.71% $5,999 3.83%
====== ======= ====== ======
Ratio on interest-earning assets to
interest-bearing liabilities 130% 122%
====== ========
</TABLE>
14
<PAGE>
GUARANTY FEDERAL BANCSHARES, INC.
Results of Operations - Comparison of Three Month and
Nine Month Periods Ended March 31, 1999 and 1998
Net income for the three months and nine months ended March 31, 1999 was
$823,623 and $2,442,155, as compared to $843,243 and $1,954,534 for the three
months and nine months ended March 31, 1998 which represents an decrease in
earnings of $19,620 or 2.3% for the three month period, and a increase in
earnings of $487,621 or 24.9% for the nine month period.
Interest Income
- ---------------
Total interest income for the three months and nine months ended March 31,
1999, increased $861,901 or 19.7% and $2,828,985 or 22.6% as compared to the
three months and nine months ended March 31, 1998. For the nine month period
ended March 31, 1999 compared to the same period in 1998, the average yield on
interest earning assets decreased 38 basis points to 7.62%, while the average
balance of interest earnings assets increased $59,858,000 over the same period
one year ago.
Interest Expense
- ----------------
Total interest expense for the three months and nine months ended March 31,
1999, increased $644,590 or 31.8% and $1,329,823 or 20.3% when compared to the
three months and nine months ended March 31, 1998. For the nine month period
ended March 31, 1999, the average cost of interest bearing liabilities decreased
1 basis point to 5.07% while the average balance increased $35,234,000 when
compared to the same period in 1998.
Net Interest Income
- -------------------
Net interest income for the three months and nine months ended March 31,
1999, increased $217,311, or 9.2% and $1,499,162, or 25.0% when compared to the
same period in 1998. The increase in net interest income for the nine months
ended March 31, 1999 was the result of a $24,624,000 increase in average net
interest earnings assets offset by a 37 basis point decrease in net interest
margin compared to the same period in 1998. This increase in net interest
earning assets was primarily due to the inflow of cash from the stock
conversion, which was converted to interest earning assets, primarily in the
form of loans originated by the Bank. This resulted in an increase in net
interest income for the nine month period ended March 31, 1999 even though the
yield on interest earning assets decreased by 38 basis points, compared to a
decrease of 1 basis point on interest bearing liabilities, when compared to the
same period in 1998.
15
<PAGE>
GUARANTY FEDERAL BANCSHARES, INC.
Provision for Loan Losses
- -------------------------
Based primarily on the continued growth of the loan portfolio management
decided to increase the allowance for loan loss reserve through a provision for
loan loss of $45,000 and $135,000 for the three months and nine months ended
March 31, 1999, respectively, compared to $30,000 and $93,352 for the same
period in 1998. The Bank will continue to monitor its allowance for loan losses
and make future additions based on economic and regulatory conditions. Although
the Bank maintains its allowance for loan losses at a level which it considers
to be sufficient to provide for potential losses, there can be no assurance that
future losses will not exceed internal estimates. In addition, the amount of the
allowance for loan losses is subject to review by regulatory agencies which can
order the establishment of additional loss provisions.
Noninterest Income
- ------------------
Noninterest income increased $18,307 or 7.3% and $141,997, or 20.2% for the
three months and nine months ended March 31, 1999, when compared to the three
months and nine months ended March 31, 1998. The increase was primarily due to
an increase in checking account service charges, which increased $48,654 or
32.3% and $201,181 or 47.3% for the three months and nine months ended March 31,
1999, when compared to the same period in 1998.
Noninterest Expense
- -------------------
Noninterest expense increased $271,128, or 21.8% for the three months ended
March 31, 1999, and increased $926,849, or 26.4% for the nine month period
ending March 31, 1999 when compared to the three months and nine months ended
March 31, 1998. In general this increase can be attributed to the overall
increase in accounts served, in addition to the added costs associated with the
ESOP and RSP that were formed in connection with the conversion.
Salaries and employee benefits increased $214,852, or 36.6% for the three
months ended March 31, 1999, and increased $628,896, or 37.9% for the nine
months ended March 31, 1999, when compared to the same period in 1998. This
included an increase in RRP/RSP expense of $99,313, or 374.9% for the three
months ended March 31, 1999, and an increase of $314,868, or 422.8% for the nine
months ended March 31, 1999, when compared to the same period in 1998, as well
as a decrease of $4,363, or 6.1% for the three months ended March 31, 1999, and
an increase of $155,610 or 113.9% for the nine months ended March 31, 1999, for
the ESOP expense.
16
<PAGE>
GUARANTY FEDERAL BANCSHARES, INC.
Noninterest Expense, continued
- ------------------------------
Advertising expense decreased $384, or 0.4% for the three months ended
March 31, 1999, and increased $35,721 or 12.0% for the nine months ended March
31, 1999, when compared to the same period in 1998. The primary reason for this
increase was the additional expense in connection with the marketing campaign
designed to attract checking accounts.
Data processing fees increased $27,326, or 25.9%, for the three months
ended March 31, 1999, and increased $74,441, or 24.6% for the nine months ended
March 31, 1999, when compared to the same period in 1998. These increases in
data processing were primarily due to the increases in accounts serviced and the
volume of transactions handled.
Provision for Income Taxes
- --------------------------
There was a $30,890 decrease and $185,041 increase in the provision for
income taxes for the three months and nine months ended March 31, 1999, as
compared to the same period in 1998. These changes were due to the changes in
before tax income for the three months and nine months ended March 31, 1999,
compared to the same period in 1998. . Nonperforming Assets
The allowance for loan losses is calculated based upon an evaluation of
pertinent factors underlying the various types and quality of the loans.
Management considers such factors as the repayment status of a loan, the
estimated net realizable value of the underlying collateral, the borrower's
intent and ability to repay the loan, local economic conditions and the Bank's
historical loss ratios. The Bank's allowance for loan losses as of March 31,
1999, was $2,339,409 or 0.9% of loans receivable. Total assets classified as
substandard or loss as of March 31, 1999, were $1,198,495 or 0.4% of total
assets. Management has considered nonperforming and total classified assets in
evaluating the adequacy of the Bank's allowance for loan losses.
The ratio of nonperforming assets to total assets is another useful tool in
evaluating exposure to credit risk. Nonperforming assets of the Bank include
nonperforming loans (nonaccruing loans) and assets which have been acquired as a
result of foreclosure or deed-in-lieu of foreclosure.
17
<PAGE>
GUARANTY FEDERAL BANCSHARES, INC.
Nonperforming Assets, continued
- -------------------------------
3/31/99 6/30/98 6/30/97
------- ------- -------
(Dollars In Thousands)
Nonperforming loans $ 1,025 $ 1,012 $ 1,257
Real estate and other assets
acquired in settlement of loans 3 286 210
---------- -------- --------
Total Nonperforming Assets $ 1,028 $ 1,298 $ 1,467
======== ======== =========
Total Nonperforming Assets
as a Percentage of Total
Assets 0.35% 0.50% .74%
Allowance for loan losses $ 2,339 $ 2,191 $ 2,177
Allowance for loan losses as a
Percentage of average loans, net 1.02% 1.24% 1.49%
Asset/Liability Management
- --------------------------
The goal of the Bank's asset/liability policy is to manage interest rate
risk so as to maximize net interest income over time in changing interest rate
environments. Management monitors the Bank's net interest spreads (the
difference between yields received on assets and paid on liabilities) and,
although constrained by market conditions, economic conditions, and prudent
underwriting standards, it offers deposit rates and loan rates that maximize net
interest income. Management also attempts to fund the Bank's assets with
liabilities of a comparable duration to minimize the impact of changing interest
rates on the Bank's net interest income. Since the relative spread between
financial assets and liabilities is constantly changing, the Bank's current net
interest income may not be an indication of future net interest income.
The Bank's initial efforts to manage interest rate risk included
implementing an adjustable rate mortgage loan ("ARM") program beginning in the
early 1980s. The ARMs have met with excellent customer acceptance. As of June
30, 1998, ARMs constituted 71.0% of the Bank's mortgage loan portfolio. However
during the first and second quarter of fiscal year 1999, the general level of
long-term interest rates dropped and borrowers opted for fixed rate mortgages.
As of March 31, 1999, ARMs represent 60.3% of the loan portfolio. Of the ARMs
originated during the first and second quarter of fiscal year 1999, borrowers
preferred initial fixed rate periods of three or five years. In response to this
shift in customer preference, the Bank has continued a program of borrowing
longer-term funds from the FHLB.
18
<PAGE>
GUARANTY FEDERAL BANCSHARES, INC.
The Bank is also managing interest rate risk by the origination of
construction loans. As of March 31, 1999, such loans made up 8.1% of the Bank's
loan portfolio. In general, these loans have higher yields, shorter maturities
and greater interest rate sensitivity than other real estate loans.
The Bank constantly monitors its deposits in an effort to decrease their
interest rate sensitivity. Rates of interest paid on deposits at the Bank are
priced competitively in order to meet the Bank's asset/liability management
objectives and spread requirements. As of June 30, 1998, the Bank's savings
accounts, checking accounts, and money market deposit accounts totaled
$36,855,202 or 26.1% of its total deposits. As of March 31, 1999, these accounts
totaled $43,349,174 or 31.6% of total deposits. The Bank believes, based on
historical experience, that a substantial portion of such accounts represents
non-interest rate sensitive, core deposits.
The value of the Bank's loan portfolio will change as interest rates
change. Rising interest rates will decrease the Bank's net portfolio value,
while falling interest rates increase the value of that portfolio.
19
<PAGE>
GUARANTY FEDERAL BANCSHARES, INC.
Interest Rate Sensitivity Analysis
- ----------------------------------
The following table sets forth as of December 31, 1998 (the most recent
available), OTS estimate of the projected changes in net portfolio value ("NPV")
in the event of 100, 200, 300, and 400 basis point ("bp") instantaneous and
permanent increases and decreases in market interest rates. Dollar amounts are
expressed in thousands.
NPV as %
BP Change Estimated Net Portfolio Value of PV Assets
in Rates $ Amount $ Change % Change NPV Ratio BP Change
- --------- -------- -------- -------- --------- ---------
+400 bp $ 57,819 $ (941) -2% 21.3% +118 bp
+300 59,791 1,030 +2% 21.6% +143 bp
+200 60,764 2,003 +3% 21.5% +135 bp
+100 60,506 1,746 +3% 21.0% +90 bp
NC 58,760 20.1%
- -100 55,641 (3,120) -5% 18.9% -129 bp
- -200 51,948 (6,812) -12% 17.4% -275 bp
- -300 48,261 (10,499) -18% 15.9% -421 bp
- -400 43,946 (14,814) -25% 14.3% -584 bp
Computations of prospective effects of hypothetical interest rate changes
are calculated by the OTS from data provided by the Bank and are based on
numerous assumptions, including relative levels of market interest rates, loan
repayments and deposit run-offs, and should not be relied upon as indicative of
actual results. Further, the computations do not contemplate any actions the
Bank may undertake in response to changes in interest rates.
Management cannot predict future interest rates or their effect on the
Bank's NPV in the future. Certain shortcomings are inherent in the method of
analysis presented in the computation of NPV. For example, although certain
assets and liabilities may have similar maturities or periods to repricing, they
may react in differing degrees to changes in market interest rates.
Additionally, certain assets, such as adjustable rate loans, which represent the
Bank's primary loan product, have an initial fixed rate period typically from
one to five years and over the remaining life of the asset changes in the
interest rate are restricted. In addition, the proportion of adjustable rate
loans in the Bank's portfolio could decrease in future periods due to
refinancing activity if market interest rates remain or decrease in the future.
Further, in the event of a change in interest rates, prepayment and early
withdrawal levels could deviate significantly from those assumed in the table.
Finally, the ability of many borrowers to service their adjustable-rate debt may
decrease in the event of an interest rate increase.
20
<PAGE>
GUARANTY FEDERAL BANCSHARES, INC.
Interest Rate Sensitivity Analysis, continued
- ---------------------------------------------
The Bank's Board of Directors is responsible for reviewing the asset and
liability policies. The Board meets quarterly to review interest rate risk and
trends, as well as liquidity and capital ratios and requirements. The Bank's
management is responsible for administering the policies and determinations of
the Board of Directors with respect to the Bank's asset and liability goals and
strategies. Management expects that the Bank's asset and liability policies and
strategies will continue as described above so long as competitive and
regulatory conditions in the financial institution industry and market interest
rates continue as they have in recent years.
The Bank's primary sources of funds are deposits, principal and interest
payments on loans, and securities and extensions of credit from the Federal Home
Loan Bank of Des Moines. While scheduled loan and security repayments and the
maturity of short-term investments are somewhat predictable sources of funding,
deposit flows are influenced by many factors which make their cash flows
difficult to anticipate. Office of Thrift Supervision regulations require the
Bank to maintain cash and eligible investments in an amount equal to at least 4%
of customer accounts and short-term borrowings to assure its ability to meet
demands for withdrawals and repayment of short-term borrowings. As of March 31,
1999, the Bank's liquidity ratio was 19.4%, which exceeded the minimum
regulatory requirement.
The Bank uses its liquidity resources principally to satisfy its ongoing
commitments which include funding loan commitments, funding maturing
certificates of deposit as well as deposit withdrawals, maintaining liquidity,
purchasing investments, and meeting operating expenses. As of March 31, 1999,
the Bank had approximately $6,038,000 in commitments to originate mortgage loans
and $13,832,000 in loans-in-process on mortgage loans. These commitments will be
funded through existing cash balances, cash flow from operations and, if
required, FHLB advances . Management believes that anticipated cash flows and
deposit growth will be adequate to meet the Bank's liquidity needs.
21
<PAGE>
GUARANTY FEDERAL BANCSHARES, INC.
Impact of Year 2000
As with all financial institutions, the Year 2000 issue is considered high
priority. Through much evaluation and testing, the banking industry is being
regarded as one of the most prepared. We have evaluated and tested all systems
we consider mission-critical. Mission-critical systems are defined as systems
that the Bank considers being crucial to the basic daily operation. Core
business processes have also been evaluated.
In addition to our own in-house testing, the Bank participated as a proxy
institution in testing services and applications provided by our online service
bureau. This means our actual data in regards to accounts and balances, date
specific processes, as well as calculations were used in the testing process. It
was our opinion that actually using our own data for testing was more important
than relying on other institutions' results-based reports.
The Bank has also been reviewed in two separate phases by our regulatory
agency, the Office of Thrift Supervision. It has been determined in each phase
of examination that we are following all guidelines and meeting the specific
time deadlines.
The evaluation of risk was categorized into three areas: (1) our own
systems, (2) systems used by borrowers, depositors, and business partners, and
(3) systems provided by data processing services.
Our own systems. The Bank has developed an expenditure plan of
approximately $235,000 ($175,000 for hardware/software upgrades and $60,000 in
consultant and employee costs). As of March 31, 1999, the Bank has spent
approximately $87,000 of the plan ($61,000 in hardware/software upgrades and
$26,000 in consultant and employee costs). These systems are scheduled for
completion by June 30, 1999.
Systems used by borrowers, depositors, and business partners. The Bank has
evaluated most of our material borrowers and depositors and does not believe
that the Year 2000 problem should, on an aggregate basis, impact their ability
to make payments or deposits to the Bank. We feel that most of our residential
customers are not dependent on their individual home computers for income and
that none of our commercial customers are so large that a Year 2000 problem
would render them unable to collect revenue or rent and, in turn, continue to do
business with the Bank. We have solicited our material business partners
regarding their Year 2000 readiness and favorably evaluated the responses.
22
<PAGE>
GUARANTY FEDERAL BANCSHARES, INC.
Impact of Year 2000, continued
Systems provided by data processing services. This category is the most
vital to the core business processes the Bank performs. We use an online data
service bureau and other third-party vendors to process all transactional and
reporting business. As mentioned, we have participated as a proxy institution in
testing the core processing system with our service bureau. A crew of several
key employees of the Bank went through the processes of gathering pertinent
account information and test transactions, entering data in a staged
post-Year2000 environment, documenting information, and reviewing testing
results. Our findings were addressed by the service bureau, and corrections made
where applicable. Other third-party vendors have also been tested, either
directly by us or, when applicable, in conjunction with our service bureau. In
the aggregate, testing has been completed on these systems, and the Bank is
reviewing the testing results provided.
Contingency planning. Although the majority of information we have compiled
through testing and evaluation has indicated that the Bank should experience
none, or very minimal issues with the Year 2000, we still must prepare for more
severe circumstances. In contingency planning, the Bank must assess how to
continue providing what is considered core business processes if the usual
process is found to be unrecoverable. The Bank is currently developing a plan in
conjunction with our online data service bureau and with independent
consultation. Categorically, core business processes will be recovered in
alternative forms, either by bringing the process in-house or manually
processing business transactions on a temporary basis until solutions can be
provided.
This discussion of the impact of the Year 2000 is a Year 2000 readiness
disclosure within the meaning of the Year 2000 Readiness and Disclosure Act.
23
<PAGE>
GUARANTY FEDERAL BANCSHARES, INC.
PART II
Item 1. Legal Proceedings
- --------------------------
None.
Item 2. Changes in Securities
- ------------------------------
Not applicable.
Item 3. Defaults Upon Senior Securities
- ----------------------------------------
Not applicable.
Item 4. Submission of Matters to Vote of Common Stockholders
- -------------------------------------------------------------
None.
Item 5. Other Information
- --------------------------
None.
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
a) Exhibits
None.
b) Reports on Form 8-K
None.
24
<PAGE>
GUARANTY FEDERAL BANCSHARES, INC.
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934,
the registrant has this report to be signed on its behalf by the undersigned,
thereunto duly authorized. Guaranty Federal Bancshares, Inc.
Signatures Date
/s/ James E. Haseltine May 14, 1999
- ------------------------- -------------------------
James E. Haseltine
President and Chief Executive Officer
(Principal Executive Officer)
/s/ Bruce Winston May 14, 1999
- ------------------------- -------------------------
Bruce Winston
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
QUARTERLY REPORT ON FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL INFORMATION.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-END> MAR-31-1999
<CASH> 1,245
<INT-BEARING-DEPOSITS> 6,457
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 14,966
<INVESTMENTS-CARRYING> 11,954
<INVESTMENTS-MARKET> 11,750
<LOANS> 249,191
<ALLOWANCE> 2,339
<TOTAL-ASSETS> 295,449
<DEPOSITS> 137,306
<SHORT-TERM> 90,228
<LIABILITIES-OTHER> 4,712
<LONG-TERM> 0
0
0
<COMMON> 624
<OTHER-SE> 62,579
<TOTAL-LIABILITIES-AND-EQUITY> 295,449
<INTEREST-LOAN> 13,663
<INTEREST-INVEST> 1,291
<INTEREST-OTHER> 408
<INTEREST-TOTAL> 15,362
<INTEREST-DEPOSIT> 4,536
<INTEREST-EXPENSE> 7,865
<INTEREST-INCOME-NET> 7,497
<LOAN-LOSSES> 135
<SECURITIES-GAINS> 47
<EXPENSE-OTHER> 4,432
<INCOME-PRETAX> 3,777
<INCOME-PRE-EXTRAORDINARY> 3,777
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,023
<EPS-PRIMARY> .44
<EPS-DILUTED> .43
<YIELD-ACTUAL> 3.71
<LOANS-NON> 1,025
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 2,185
<CHARGE-OFFS> 13
<RECOVERIES> 32
<ALLOWANCE-CLOSE> 2,339
<ALLOWANCE-DOMESTIC> 2,339
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
