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, 2000
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) 520-4333
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 4, 2000
----- --------------------------
Common Stock, Par Value $0.10 4,921,216 Shares
<PAGE>
GUARANTY FEDERAL BANCSHARES, INC.
FORM 10-Q FOR MARCH 31, 2000
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
Results of Operations 9
3. Quantitative and Qualitative Disclosures about Market Risk 12
PART II. Other Information
--------------------------
1. Legal Proceedings 15
2. Changes in Securities and Use of Proceeds 15
3. Defaults Upon Senior Securities 15
4. Submission of Matters to Vote of Security-holders 15
5. Other Information 15
6. Exhibits and Reports on Form 8-K 15
Signatures 16
<PAGE>
GUARANTY FEDERAL BANCSHARES, INC.
FORM 10-Q FOR MARCH 31, 2000
PART I
GUARANTY FEDERAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
MARCH 31, 2000 (UNAUDITED) AND JUNE 30, 1999
<TABLE>
<CAPTION>
ASSETS 3/31/2000 6/30/1999
--------- ---------
<S> <C> <C>
Cash $ 1,675,379 1,656,648
Interest-bearing deposits in other financial institutions 4,716,726 8,032,473
------------- -------------
Cash and cash equivalents 6,392,105 9,689,121
Available-for-sale securities 7,826,733 8,951,175
Held-to-maturity securities 8,569,036 15,394,643
Mortgage loans held for sale 673,835 769,074
Loans receivable, less allowance for loan losses of
3/31/00 - $2,474,972; 6/30/99 - $2,349,328 289,594,407 263,499,778
Accrued interest receivable:
Loans 1,650,174 1,459,508
Investments 111,531 297,431
Prepaid expenses and other assets 6,889,931 5,671,845
Foreclosed assets held for sale 1,200 101,546
Premises and equipment, net 6,309,481 7,365,392
------------- -------------
$ 328,018,433 313,199,513
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits $ 144,855,339 141,137,154
Federal Home Loan Bank advances 121,150,087 104,794,640
Advances from borrowers for taxes and insurance 944,670 1,195,545
Accrued expenses and other liabilities 1,324,772 499,221
Accrued interest payable 714,358 543,641
Income taxes payable 382,590 235,587
Deferred income taxes 775,021 1,360,503
------------- -------------
270,146,837 249,766,291
------------- -------------
STOCKHOLDERS' EQUITY
Common Stock:
$0.10 par value; authorized 10,000,000 shares;
issued; 3/31/00 - 6,249,737 shares,
6/30/99 - 6,245,775 shares 624,974 624,578
Additional paid-in capital 47,791,341 47,366,264
Unearned ESOP shares (2,927,850) (3,100,080)
Retained earnings, substantially restricted 23,749,118 23,236,009
Accumulated other comprehensive income
Unrealized appreciation on available-for-sale securities,
net of income taxes; 3/31/00 - $1,452,692,
6/30/99 - $2,026,448 2,473,502 3,438,826
------------- -------------
71,711,085 71,565,597
Treasury stock, at cost - 3/31/00 - 1,153,052 shares,
6/30/99- 642,127 shares (13,839,489) (8,132,375)
------------- -------------
57,871,596 63,433,222
------------- -------------
$ 328,018,433 313,199,513
============= =============
</TABLE>
See Notes to Condensed Consolidated Financial Statements
3
<PAGE>
GUARANTY FEDERAL BANCSHARES, INC.
FORM 10-Q FOR MARCH 31, 2000
GUARANTY FEDERAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME
THREE AND NINE MONTHS ENDED MARCH 31, 2000 AND 1999 (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ending Nine Months Ending
-------------------------- -------------------------
03/31/2000 03/31/1999 03/31/2000 03/31/1999
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans $ 5,679,216 4,689,386 16,240,905 13,663,415
Investment securities 218,118 416,485 629,789 1,291,061
Other 154,294 139,829 474,831 408,104
----------- ----------- -----------
Total Interest Income 6,051,628 5,245,700 17,345,525 15,362,580
----------- ----------- ----------- -----------
INTEREST EXPENSE
Deposits 1,548,637 1,433,321 4,559,690 4,535,589
Federal Home Loan Bank advances 1,752,297 1,239,382 4,847,027 3,328,994
----------- ----------- ----------- -----------
Total Interest Expense 3,300,934 2,672,703 9,406,717 7,864,583
----------- ----------- ----------- -----------
Net Interest Income 2,750,694 2,572,997 7,938,808 7,497,997
Provision for Loan Losses 45,000 45,000 135,000 135,000
----------- ----------- ----------- -----------
Net Interest Income after
Provision for Loan Losses 2,705,694 2,527,997 7,803,808 7,362,997
----------- ----------- ----------- -----------
NONINTEREST INCOME (LOSS)
Service charges 262,954 199,084 822,743 626,236
Late charges and other fees 34,084 32,570 117,996 83,867
Gain (Loss) on loans and investment securities (3,185) 8,535 (5,034) 47,238
Income (expense) on foreclosed assets 8,716 (4,291) 21,657 (11,281)
Other income 34,015 34,884 45,373 99,050
----------- ----------- ----------- -----------
Total Noninterest income 336,584 270,782 1,002,735 845,110
----------- ----------- ----------- -----------
NONINTEREST EXPENSE
Salaries and employee benefits 837,224 802,633 2,523,437 2,287,793
Occupancy 209,104 205,476 605,374 577,981
SAIF deposit insurance premiums 7,656 20,783 48,790 63,859
Data processing fees 144,035 132,873 391,334 377,290
Advertising 117,393 107,916 273,735 332,767
Other expense 334,299 246,927 888,513 791,818
----------- ----------- ----------- -----------
Total Noninterest Expense 1,649,711 1,516,608 4,731,183 4,431,508
----------- ----------- ----------- -----------
Income before Income Taxes 1,392,567 1,282,171 4,075,360 3,776,599
Provision for Income Taxes 494,229 458,548 1,475,405 1,334,444
----------- ----------- ----------- -----------
NET INCOME 898,338 823,623 2,599,955 2,442,155
OTHER COMPREHENSIVE INCOME (LOSS)
Unrealized appreciation (depreciation) on
available-for-sale securities (212,536) (451,431) (965,324) 581,070
----------- ----------- ----------- -----------
COMPREHENSIVE INCOME $ 685,802 372,192 1,634,631 3,023,225
=========== =========== =========== ===========
BASIC EARNINGS PER SHARE $ 0.18 0.15 0.51 0.44
=========== =========== =========== ===========
DILUTED EARNINGS PER SHARE $ 0.18 0.15 0.51 0.43
=========== =========== =========== ===========
</TABLE>
See Notes to Condensed Consolidated Financial Statements
4
<PAGE>
GUARANTY FEDERAL BANCSHARES, INC.
FORM 10-Q FOR MARCH 31, 2000
GUARANTY FEDERAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
NINE MONTHS ENDED MARCH 31, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
Accumulated Other
Comprehensive Income
--------------------
Appreciation
Additional (Depreciation) on
Paid Unearned Retained Available-for-Sale
Common Stock In Capital ESOP Shares Earnings Securities, Net Treasury Stock Total
------------ ---------- ----------- -------- --------------- -------------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, June 30, 1999 $ 624,578 47,366,264 (3,100,080) 23,236,009 3,438,826 (8,132,375) 63,433,222
Net income - - - 2,599,955 - - 2,599,955
Dividends on common stock,
($0.20 per share on
5,156,256 shares &
$0.22 per share on
4,798,163 shares) - - - (2,086,846) - - (2,086,846)
Recognition and
Retention Plan (RRP) &
Restricted Stock
Plan (RSP):
RRP and RSP expense - 371,955 - - - - 371,955
Dividends on RRP Stock - 6,567 - - - - 6,567
Tax benefit of RRP & RSP - 3,831 - - - - 3,831
Stock options exercised 396 23,455 - - - - 23,851
Release of ESOP shares - 19,269 172,230 - - - 191,499
Treasury stock purchased - - - - - (5,707,114) (5,707,114)
Change in unrealized
appreciation on
available-for-sale
securitites, net of
income taxes of $566,936 - - - - (965,324) - (965,324)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Balance, March 31, 2000 $ 624,974 47,791,341 (2,927,850) 23,749,118 2,473,502 (13,839,489) 57,871,596
=========== =========== =========== =========== =========== =========== ===========
</TABLE>
See Notes to Condensed Consolidated Financial Statements
5
<PAGE>
GUARANTY FEDERAL BANCSHARES, INC.
FORM 10-Q FOR MARCH 31, 2000
GUARANTY FEDERAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
NINE MONTHS ENDED MARCH 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
Accumulated Other
Comprehensive Income
--------------------
Appreciation
Additional (Depreciation) on
Paid Unearned Retained Available-for-Sale
Common Stock In Capital ESOP Shares Earnings Securities, Net Treasury Stock Total
------------ ---------- ----------- -------- --------------- -------------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, June 30, 1998 $ 622,804 49,016,992 (3,444,540) 21,682,950 2,811,892 - 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)
Recognition and
Retention Plan (RRP) &
Restricted Stock Plan (RSP):
RSP stock purchased - (2,373,065) - - - - (2,373,065)
RRP and RSP expense - 389,338 - - - - 389,338
Dividends on RRP stock - 7,500 - - - - 7,500
Tax benefit of RRP & RSP - 23,554 - - - - 23,554
Stock options exercised 1,485 87,930 - - - - 89,415
Release of ESOP shares - 62,864 287,050 - - - 349,914
Treasury stock purchased - - - - - (7,192,271) (7,192,271)
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) 22,320,036 3,392,962 (7,192,271) 63,202,639
=========== =========== =========== =========== =========== =========== ===========
</TABLE>
See Notes to Condensed Consolidated Financial Statements
6
<PAGE>
GUARANTY FEDERAL BANCSHARES, INC.
FORM 10-Q FOR MARCH 31, 2000
GUARANTY FEDERAL BANCSHARES, INC
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED MARCH 31, 2000 AND 1999 (UNAUDITED)
<TABLE>
<CAPTION>
03/31/2000 03/31/1999
---------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 2,599,955 2,442,155
Items not requiring (providing) cash:
Deferred income taxes (18,546) (86,523)
Depreciation 342,797 315,209
Provision for loan losses 135,000 135,000
(Gain) loss on loans and investment securities 5,034 (47,238)
Loss on sale of premises and equipment 64,298 -
(Gain) loss on sale of foreclosed assets (13,372) 3,295
Amortization of deferred income, premiums and discounts 24,688 66,695
RRP/RSP expense 371,955 389,338
Origination of loans held for sale (3,578,374) (8,213,377)
Proceeds from sale of loans held for sale 3,668,579 7,621,200
Release of ESOP shares 191,499 349,914
Changes in:
Accrued interest receivable (4,766) 32,665
Prepaid expenses and other assets (358,486) (203,703)
Accounts payable and accrued expenses (59,327) 192,645
Income taxes payable 147,003 84,138
------------ ------------
Net cash provided by operating activities 3,517,937 3,081,413
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Net increase in loans (26,266,397) (40,182,514)
Principal payments on available-for-sale securities 402,179 4,585,363
Principal payments on held-to-maturity securities 1,662,067 3,217,266
Purchase of premises and equipment (333,358) (318,351)
Proceeds from sale of premises and equipment 982,174 -
Purchase of available-for-sale securities (335,578) (501,561)
Proceeds from maturities of held-to-maturity securities 4,700,000 1,330,235
Purchase of FHLB stock (859,600) (2,257,400)
Proceeds from sale of foreclosed assets 114,918 330,641
Capitalized costs on foreclosed assets - 46
------------ ------------
Net cash used in investing activities (19,933,595) (33,796,275)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Tax benefit of vested RRP shares 3,831 23,554
Stock options exercised 23,851 89,415
Cash dividends paid (1,031,250) (839,899)
Cash dividends received on RRP Stock 6,567 7,500
Net increase in demand deposits,
NOW accounts and savings accounts 4,524,799 6,493,972
Net increase (decrease) in certificates of deposit (806,614) (10,163,325)
Proceeds from FHLB advances 38,686,124 49,092,500
Repayments of FHLB advances (22,330,677) (3,945,157)
Advances from borrowers for taxes and insurance (250,875) (80,538)
RSP stock purchased - (2,373,065)
Treasury stock purchased (5,707,114) (7,192,271)
------------ ------------
Net cash provided by financing activities 13,118,642 31,112,686
------------ ------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (3,297,016) 397,824
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 9,689,121 7,304,923
------------ ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 6,392,105 7,702,747
============ ============
</TABLE>
See Notes to Condensed Consolidated Financial Statements
7
<PAGE>
GUARANTY FEDERAL BANCSHARES, INC.
FORM 10-Q FOR MARCH 31, 2000
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1: Conversion, Reorganization and Stock Issuance
---------------------------------------------
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 $8.00 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.
On December 30, 1997, the MHC completed a conversion to Guaranty
Federal Bancshares, Inc. (the "Company"), a Delaware-chartered stock
corporation. Stockholders' equity increased to $69.5 million primarily due to
the conversion in which the Company exchanged 1,880,710 shares of its common
stock for all the Bank's common stock not held by the MHC. This exchange ratio
was 1.931. In addition, the Company sold 4,340,812 shares at $10.00 per share in
a 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.
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.
The results of operations for the period are not necessarily indicative
of the results to be expected for the full year.
These condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes thereto
included in the Company's Form 10-K annual report for 1999 filed with the
Securities and Exchange Commission. The condensed consolidated balance sheet of
the Company as of June 30, 1999, has been derived from the audited consolidated
balance sheet of the Company as of that date. Certain information and note
disclosures normally included in the Company's annual financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted.
Note 3: Principles of Consolidation
---------------------------
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: 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 both a 1998 Restricted
Stock Plan ("RSP") and a 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, 2000, all of the RRP and RSP shares have been purchased and all
except 1,925 shares have been awarded. The Bank is amortizing the RRP and RSP
expense over each participant's vesting period and the financial statements
reflect $371,955 RRP and RSP expense for the nine month period ending March 31,
2000. The SOP and 1998 SOP authorized stock options on shares to be issued to
officers and employees of the Bank, as of March 31, 2000 all options except
those on 21,263 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
8
<PAGE>
GUARANTY FEDERAL BANCSHARES, INC.
FORM 10-Q FOR MARCH 31, 2000
periods remaining unchanged. As of March 31, 2000, there were 569,086
unexercised options that have been granted at prices ranging from $5.83 to
$13.44 per share and 158,095 RRP and RSP shares were unvested.
Note 5: Earnings Per Share
------------------
<TABLE>
<CAPTION>
For three months ended March 31, 2000 For nine months ended March 31, 2000
------------------------------------- ------------------------------------
Income Average Income Average
Available to Shares Available to Shares
Stockholders Outstanding Per-Share Stockholders Outstanding Per-Share
------------ ----------- --------- ------------ ---------------------
<S> <C> <C> <C> <C> <C> <C>
Basic Earnings per Share $ 898,338 4,928,861 $ 0.18 $ 2,599,955 5,076,310 $ 0.51
=======
Effect of Dilutive Securities: Stock Options 46,827 52,127
--------- ---------
Diluted Earnings per Share $ 898,338 4,975,688 $ 0.18 $ 2,599,955 5,128,437 $ 0.51
========== ========== ======= ============ ========== ======
</TABLE>
<TABLE>
<CAPTION>
For three months ended March 31, 1999 For nine months ended March 31, 1999
------------------------------------- ------------------------------------
Income Average Income Average
Available to Shares Available to Shares
Stockholders Outstanding Per-Share Stockholders Outstanding Per-Share
------------ ----------- --------- ------------ ---------------------
<S> <C> <C> <C> <C> <C> <C>
Basic Earnings per Share $ 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
--------- --------
Diluted Earnings per Share $ 823,623 5,519,394 $ 0.15 $ 2,442,155 5,633,467 $ 0.43
========= ========= ====== =========== ========= ======
</TABLE>
Options to purchase 5,000, 16,704, 5,000 and 425,483 shares of common
stock at $11.75, $12.25, $12.63 and $13.44 per share, respectively, outstanding
during the three months and nine months ended March 31, 2000, 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.
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 operations 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, 2000 and the results of operations for the three months
and nine months ended March 31, 2000 and 1999.
9
<PAGE>
GUARANTY FEDERAL BANCSHARES, INC.
FORM 10-Q FOR MARCH 31, 2000
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 changes in the general
level of interest rates.
Financial Condition
- -------------------
The Company's's total assets increased $14,818,920 (5%) from
$313,199,513 as of June 30, 1999, to $328,018,433 as of March 31, 2000.
Interest-bearing deposits in other financial institutions decreased
$3,315,747 (41%) from $8,032,473 as of June 30, 1999, to $4,716,726 as of March
31, 2000, as the funds were used to fund new loans.
Securities available-for-sale decreased $1,124,442 (13%) from
$8,951,175 as of June 30, 1999, to $7,826,733 as of March 31, 2000. This is
primarily due to the decrease in fair value of various equity securities. The
Bank continues to hold 96,000 shares of Federal Home Loan Mortgage Corporation
("FHLMC") stock with an amortized cost of $94,000 in the available-for-sale
category. As of March 31, 2000, the gross unrealized gain on the stock was
$4,518,000, a decrease from $5,474,000 as of June 30, 1999.
Securities held-to-maturity decreased due to maturities and principal
repayments, by $6,825,607 (44%) from $15,394,643 as of June 30, 1999, to
$8,569,036 as of March 31, 2000.
Net loans receivable increased by $26,094,629 (10%) from $263,499,778
as of June 30, 1999, to $289,594,407 as of March 31, 2000. Permanent mortgage
loans secured by both owner and non-owner occupied residential real estate
increased by $14,187,000 and construction loans increased by $5,782,000. Loan
growth is anticipated to continue and represents a major part of the Bank's
planned assets growth.
Allowance for loan losses increased $125,644 (5%) from $2,349,328 as of
June 30, 1999, to $2,474,972 as of March 31, 2000. The allowance increased due
to the provision for loan losses for the period exceeding net loan charge-offs.
The allowance for loan losses as of March 31, 2000 and June 30, 1999 was 0.85%,
and 0.89% respectively, of net loans outstanding. As of March 31, 2000, the
allowance for loan losses was 219.9% of impaired loans versus 259.3% as of June
30, 1999.
Fair value of foreclosed assets held-for-sale decreased $100,346 (99%)
from $101,546 as of June 30, 1999, to $1,200 as of March 31, 2000. This decrease
was due to the sale of foreclosed assets. The Bank recorded a gain of $13,372 on
the sale of these assets.
Deposits increased $3,718,185 (3%) from $141,137,154 as of June 30,
1999, to $144,855,339 as of March 31, 2000. For the nine months ended March 31,
2000, checking and passbook accounts increased by $4,524,799 (10%) while
certificates of deposits decreased by $806,614 (1%).
In order to fund the increase in loan demand and the repurchase of
Company stock, the Company increased borrowing from the Federal Home Loan Bank
(the "FHLB") by $16,355,447 (16%) from $104,794,640 as of June 30, 1999, to
$121,150,087 as of March 31, 2000. As of March 31, 2000, the Bank had the
ability to borrow an additional $66 million from the FHLB.
Advances from borrowers for taxes and insurance decreased $250,875
(21%) from $1,195,545 as of June 30, 1999, to $944,670 as of March 31, 2000. The
majority of this decrease is due to the payment of 1999 real estate taxes from
borrower's escrow accounts.
10
<PAGE>
GUARANTY FEDERAL BANCSHARES, INC.
FORM 10-Q FOR MARCH 31, 2000
Accrued expenses and other liabilities increased $825,551 (165%) from
$499,221 as of June 30, 1999, to $1,324,772 as of March 31, 2000. The majority
of this increase is due to a $0.22 per share dividend payable to stockholders of
record March 30, 2000, totaling $1,055,596.
Stockholders' equity (including unrealized appreciation on securities
available-for-sale, net of tax) decreased $5,561,626 (9%) from $63,433,222 as of
June 30, 1999, to $57,871,596 as of March 31, 2000. This decrease was due to
several factors. During this period the Company repurchased a total of 510,925
of its outstanding shares in the open market at a cost of $5,707,114. In
addition, dividends in the amount of $1,031,250 ($0.20 per share) and
$1,055,596, ($0.22 per share) were declared and paid, on September 30, 1999 and
April 14, 2000, to stockholders' of record as of September 7, 1999 and March 30,
2000, respectively. There was also a decrease in the unrealized appreciation on
available-for-sale securities of $965,324. On a per share basis, stockholders'
equity increased from $11.98 as of June 30, 1999 to $12.05 as of March 31, 2000.
Results of Operations - Comparison of Three Month and Nine Month Periods Ended
- --------------------------------------------------------------------------------
March 31, 2000 and 1999
- -----------------------
Net income for the three months and nine months ended March 31, 2000
was $898,338 ($0.18 per share) and $2,599,955 ($0.51 per share) as compared to
$823,623 ($0.15 per share) and $2,442,155 ($0.44 per share) for the three months
and nine months ended March 31, 1999, which represents an increase in earnings
of $74,715 (9%) for the three month period and an increase in earnings of
$157,800 (6%) for the nine month period.
Interest Income
Total interest income for the three months and nine months ended March
31, 2000, increased $805,928 (15%) and $1,982,945 (13%) as compared to the three
months and nine months ended March 31, 1999. For the nine month period ended
March 31, 2000 compared to the same period in 1999, the average yield on
interest earning assets decreased three basis points to 7.59%, while the average
balance of interest earnings assets increased $36,072,000.
Interest Expense
Total interest expense for the three months and nine months ended March
31, 2000, increased $628,231 (24%) and $1,542,134 (20%) when compared to the
three months and nine months ended March 31, 1999. For the nine month period
ended March 31, 2000, the average cost of interest bearing liabilities decreased
one basis point to 5.06% while the average balance increased $41,039,000 when
compared to the same period in 1999. The average balance of interest bearing
liabilities increased $4,967,000 more than the average balance in interest
earning assets. This reduction in net interest earning assets was due to the
purchase of treasury stock funded by Federal Home Loan Bank borrowings
Net Interest Income
Net interest income for the three months and nine months ended March
31, 2000, increased $177,697 (7%) and $440,811 (6%) when compared to the same
periods in 1999. For the nine-month period ended March 31, 2000, the earning
yield minus the costing rate spread declined two basis points to 2.53%.
Approximately $9,954,000 of the increase in earning assets and costing
liabilities at a spread of 2.53% offset the added interest expense resulting
from the reduction in net interest earning assets. The spread on the remaining
growth of assets and liabilities offset the lower interest spread and accounts
for the overall growth in net interest income.
Provision for Loan Losses
Based primarily on the continued growth of the loan portfolio,
management decided to increase the allowance for loan losses through a provision
for loan loss of $45,000 and $135,000 for the three months and nine months ended
March 31, 2000, respectively, and of $45,000 and $135,000 for the same periods
in 1999. 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.
11
<PAGE>
GUARANTY FEDERAL BANCSHARES, INC.
FORM 10-Q FOR MARCH 31, 2000
Noninterest Income
Noninterest income increased $65,802 (24%) for the three months ended
March 31, 2000 and increased $157,625 (19%) for the nine months ended March 31,
2000, when compared to the three months and nine months ended March 31, 1999.
These increases were primarily due to an increase in checking account service
charges, of $63,870 (32%) for the three months, and $196,507 (31%) for the nine
months.
Noninterest Expense
Noninterest expense increased $133,103 (9%) for the three months ended
March 31, 2000, and increased $299,675 (7%) for the nine months ending March 31,
2000 when compared to the three months and nine months ended March 31, 1999. In
general this increase can be attributed to the overall increase in accounts
served. There were no significant changes in any individual expense category.
Provision for Income Taxes
The provision for income taxes increased $35,681 (8%) and $140,961
(11%) for the three months and nine months ended March 31, 2000, as compared to
the same period in 1999. This increase was due to the increase in before tax
income for the three months and nine months ended March 31, 2000, compared to
the same period in 1999.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
- -------------------------------------------------------------------
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,
2000, was $2,474,972 or 0.9% of loans receivable. Total assets classified as
substandard or loss as of March 31, 2000, were $3,207,845 or 1.0% 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. All dollar
amounts are in thousands.
<TABLE>
<CAPTION>
03/31/2000 06/30/1999 06/30/1998
---------- ---------- ----------
<S> <C> <C> <C>
Nonperforming loans $ 1,124 906 1,012
Real estate acquired in settlement of loans 1 101 286
------- ----- -----
Total nonperforming assets $ 1,125 1,007 1,298
======== ====== =====
Total nonperforming assets as a percentage of total assets 0.34% 0.32% 0.50%
Allowance for loan losses $ 2,475 2,349 2,191
Allowance for loan losses as a percentage of average net loans 0.89% 1.00% 1.24%
</TABLE>
Average Balances, Interest and Average Yields
- ---------------------------------------------
The Company's profitability is primarily dependent upon net interest
income, which represents the difference between interest and fees earned on
loans 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. Non-interest income, non-interest expense,
and income taxes also impact net income.
12
<PAGE>
GUARANTY FEDERAL BANCSHARES, INC.
FORM 10-Q FOR MARCH 31, 2000
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. All dollar amounts are in thousands.
<TABLE>
<CAPTION>
Nine Months ended 3/31/2000 Nine Months ended 3/31/1999
----------------------------- -----------------------------
Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost
------- -------- ---- ------- -------- ----
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Interest-earning:
Loans $ 278,163 16,241 7.78% $ 228,377 13,663 7.98%
Investment securities 12,307 630 6.83% 26,453 1,291 6.51%
Other assets 14,276 475 4.44% 13,844 408 3.93%
------- ------ ----- ------- ------ -----
Total interest-earning 304,746 17,346 7.59% 268,674 15,362 7.62%
Noninterest-earning 7,794 7,650
------- -------
$ 312,540 $ 276,324
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing:
Savings accounts $ 8,420 148 2.34% $ 8,414 157 2.49%
Transaction accounts 34,843 752 2.88% 27,743 570 2.74%
Certificates of Deposit 95,057 3,660 5.13% 95,927 3,808 5.29%
FHLB Advances 109,430 4,847 5.91% 74,627 3,329 5.95%
-------- ------ ----- ------- ------ -----
Total interest-bearing 247,750 9,407 5.06% 206,711 7,864 5.07%
Noninterest-bearing 3,859 3,741
------- -------
Total liabilities 251,609 210,452
Stockholders' equity 60,931 65,872
------- -------
$ 312,540 $ 276,324
======= =======
Net earning balance $ 56,996 $ 61,963
======= =========
Earning yield less costing rate 2.53% 2.55%
===== =====
Net interest income,
and net yield spread
on interest earning assets $ 7,939 3.47% $ 7,498 3.72%
====== ===== ======== =====
Ratio on interest-earning
assets to interest-
bearing liabilities 123% 130%
==== ====
</TABLE>
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 designed to
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.
13
<PAGE>
GUARANTY FEDERAL BANCSHARES, INC.
FORM 10-Q FOR MARCH 31, 2000
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, 1999, ARMs constituted 59.3% of the Bank's mortgage loan portfolio. As of
March 31, 2000, ARMs represent 61.8% of the loan portfolio. Of the ARMs
originated during fiscal year 2000, borrowers preferred initial fixed rate
periods of three or five years. The Bank has continued to fund fixed rate loans
through a program of borrowing longer-term funds from the FHLB.
The Bank is also managing interest rate risk by the origination of
construction loans. As of March 31, 2000, such loans made up 10.5% 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, 1999, the Bank's savings
accounts, checking accounts, and money market deposit accounts totaled
$46,736,183 or 33% of its total deposits. As of March 31, 2000, these accounts
totaled $51,260,982 or 35% 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.
Interest Rate Sensitivity Analysis
- ----------------------------------
The following table sets forth as of December 31, 1999 (the most recent
available), the OTS estimate of the projected changes in net portfolio value
("NPV") in the event of 100, 200, and 300 basis point ("bp") instantaneous and
permanent increases and decreases in market interest rates. Dollar amounts are
expressed in thousands.
Estimated Net Portfolio Value NPV as % of PV of Assets
BP Change ------------------------------ ------------------------
in Rates $ Amount $ Change % Change NPV Ratio Change
--------- --------- --------- --------- ---------- ------
+300 $ 58,154 $ (7,434) -11% 19.37% -1.07%
+200 61,657 (3,931) -6% 20.04% -0.40%
+100 64,285 (1,303) -2% 20.43% -0.01%
NC 65,588 20.44%
-100 65,162 (426) -1% 19.99% -0.45%
-200 62,981 (2,607) -4% 19.09% -1.35%
-300 59,905 (5,683) -9% 17.95% -2.49%
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.
14
<PAGE>
GUARANTY FEDERAL BANCSHARES, INC.
FORM 10-Q FOR MARCH 31, 2000
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.
Liquidity and Capital Resources
- -------------------------------
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, 2000, the Bank's liquidity ratio was 8.9%, 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, 2000,
the Bank had approximately $2,670,000 in commitments to originate mortgage loans
and $13,465,000 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.
Impact of Year 2000
- -------------------
The Company believes successful remediation of mission-critical systems
has been completed in a timely manner. The Company has not experienced any
significant operational or financial problems related to the Year 2000
compliance. Management presently believes that the Year 2000 Issue will not pose
any future operational problems.
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
10.6 2000 Stock Compensation Plan
b) Reports on Form 8-K
None.
15
<PAGE>
GUARANTY FEDERAL BANCSHARES, INC.
FORM 10-Q FOR MARCH 31, 2000
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
Guaranty Federal Bancshares, Inc.
Signature and Title Date
/s/ James E. Haseltine May 4, 2000
- -------------------------------------------------- ----------------------------
James E. Haseltine
President and Chief Executive Officer
(Principal Executive Officer)
/s/ Bruce Winston May 4, 2000
- -------------------------------------------------- ----------------------------
Bruce Winston
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
EXHIBIT 10.6
2000 STOCK COMPENSATION PLAN
<PAGE>
GUARANTY FEDERAL BANCSHARES, INC.
2000 STOCK COMPENSATION PLAN
1. Purpose of the Plan. The Plan shall be known as the Guaranty Federal
-------------------
Bancshares, Inc. ("Company") 2000 Stock Compensation Plan (the "Plan"). The
purpose of the Plan is to attract and retain qualified personnel for positions
of substantial responsibility and to provide additional incentive to officers,
directors first elected or appointed after July 22, 1998, employees and other
persons providing services to the Company, or any present or future parent or
subsidiary of the Company to promote the success of the business. The Plan is
intended to provide for the grant of Stock Options that do not qualify under
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code") and
Shares of Common Stock of the Company granted as Stock Awards.
2. Definitions. The following words and phrases when used in this Plan
-----------
with an initial capital letter, unless the context clearly indicates otherwise,
shall have the meaning as set forth below. Wherever appropriate, the masculine
pronoun shall include the feminine pronoun and the singular shall include the
plural.
(a) "Award" means the grant by the Committee of Stock Options,
Stock Awards, or any combination thereof as provided in the Plan.
(b) "Board" shall mean the Board of Directors of the Company,
or any successor or parent corporation thereto.
(c) "Change in Control" shall mean: (i) the sale of all, or a
material portion, of the assets of the Company; (ii) the merger or
recapitalization of the Company whereby the Company is not the surviving entity;
(iii) a change in control of the Company, as otherwise defined or determined by
the Office of Thrift Supervision or regulations promulgated by it; or (iv) the
acquisition, directly or indirectly, of the beneficial ownership (within the
meaning of that term as it is used in Section 13(d) of the Securities Exchange
Act of 1934 and the rules and regulations promulgated thereunder) of twenty-five
percent (25%) or more of the outstanding voting securities of the Company by any
person, trust, entity or group. This limitation shall not apply to the purchase
of shares by underwriters in connection with a public offering of Company stock,
or the purchase of shares of up to 25% of any class of securities of the Company
by a tax- qualified employee stock benefit plan which is exempt from the
approval requirements, set forth under 12 C.F.R. ss.574.3(c)(1)(vi) as now in
effect or as may hereafter be amended. The term "person" refers to an individual
or a corporation, partnership, trust, association, joint venture, pool,
syndicate, sole proprietorship, unincorporated organization or any other form of
entity not specifically listed herein. The decision of the Committee as to
whether a Change in Control has occurred shall be conclusive and binding.
(d) "Code" shall mean the Internal Revenue Code of 1986, as
amended, and regulations promulgated thereunder.
(e) "Committee" shall mean the Board or the Stock Compensation
Committee appointed by the Board in accordance with Section 5(a) of the Plan.
1
<PAGE>
(f) "Common Stock" shall mean the common stock of the
Company, or any successor or parent corporation thereto.
(g) "Continuous Employment" or "Continuous Status as an
Employee" shall mean the absence of any interruption or termination of
employment with the Company or any present or future Parent or Subsidiary of the
Company. Employment shall not be considered interrupted in the case of sick
leave, military leave or any other leave of absence approved by the Company or
in the case of transfers between payroll locations, of the Company or between
the Company, its Parent, its Subsidiaries or a successor.
(h) "Company" shall mean Guaranty Federal Bancshares, Inc.,
the parent corporation of the Savings Bank, or any successor or Parent thereof.
(i) "Director" shall mean a member of the Board of the
Company, or any successor or parent corporation thereto.
(j) "Director Emeritus" shall mean a person serving as a
director emeritus, advisory director, consulting director, or other similar
position as may be appointed by the Board of Directors of the Savings Bank or
the Company from time to time.
(k) "Disability" means any physical or mental impairment
which renders the Participant incapable of continuing in the employment or
service of the Savings Bank or the Parent in his then current capacity as
determined by the Committee.
(l) "Effective Date" shall mean the date of Board adoption of
the Plan.
(m) "Employee" shall mean any person employed by the Company
or any present or future Parent or Subsidiary of the Company.
(n) "Fair Market Value" shall mean: (i) if the Common Stock
is traded otherwise than on a national securities exchange, then the Fair Market
Value per Share shall be equal to the mean between the last bid and ask price of
such Common Stock on such date or, if there is no bid and ask price on said
date, then on the immediately prior business day on which there was a bid and
ask price. If no such bid and ask price is available, then the Fair Market Value
shall be determined by the Committee in good faith; or (ii) if the Common Stock
is listed on a national securities exchange, then the Fair Market Value per
Share shall be not less than the average of the highest and lowest selling price
of such Common Stock on such exchange on such date, or if there were no sales on
said date, then the Fair Market Value shall be not less than the mean between
the last bid and ask price on such date.
(o) "Stock Option" or "Option" shall mean an option to
purchase Shares granted pursuant to the Plan which option is not intended to
qualify under Section 422 of the Code providing the holder of such Option with
the right to purchase Common Stock.
(p) "Optioned Stock" shall mean stock subject to an Option
granted pursuant to the Plan.
(q) "Optionee" shall mean any person who receives an Option
pursuant to the Plan.
2
<PAGE>
(r) "Parent" shall mean any present or future corporation
which would be a "parent corporation" as defined in Sections 424(e) and (g) of
the Code.
(s) "Participant" means any Director first elected or
appointed after July 22, 1998, officer or Employee of the Company or any Parent
or Subsidiary of the Company or any other person providing a service to the
Company who is selected by the Committee to receive an Award, or who by the
express terms of the Plan is granted an Award.
(t) "Plan" shall mean the Guaranty Federal Bancshares, Inc.
2000 Stock Compensation Plan.
(u) "Retirement" shall mean termination of service in all
capacities as an Employee, Director and Director Emeritus following attainment
of not less than age 55 and completion of not less than ten years of Service to
the Company or the Savings Bank. Service to the Company or the Savings Bank
rendered prior to the Effective Date shall be recognized in determining
eligibility to meet the requirements of Retirement under the Plan.
(v) "Savings Bank" or "Bank" shall mean Guaranty Federal
Savings Bank, or any successor corporation thereto.
(w) "Share" shall mean one share of the Common Stock.
(x) "Stock Award" means an Award granted to a Participant
pursuant to Section 12 of the Plan.
(y) "Subsidiary" shall mean any present or future corporation
which constitutes a "subsidiary corporation" as defined in Sections 424(f) and
(g) of the Code.
3. Shares Subject to the Plan. Except as otherwise required by the
---------------------------
provisions of Section 10 hereof, the aggregate number of Shares with respect to
which Awards may be made pursuant to the Plan shall not exceed *25,000 Shares.
The maximum number of Shares reserved hereby for Stock Awards is 7,125. The
maximum number of Shares reserved hereby for purchase pursuant to the exercise
of Options granted under the Plan is the difference between (i) 25,000, and (ii)
the number of Shares granted pursuant to Stock Awards. Such Shares may either be
from authorized but unissued shares or shares purchased in the market for Plan
purposes.
If an Award shall expire, become unexercisable, or be forfeited for any
reason prior to its exercise, new Awards may be granted under the Plan with
respect to the number of Shares as to which such expiration has occurred.
4. Six Month Holding Period. Subject to vesting requirements, if
------------------------
applicable, except in the event of death or disability of the Optionee, a
minimum of six months must elapse between the date of the
- --------
* Not to exceed 1% of shares outstanding as of date of Board adoption.
3
<PAGE>
grant of an Option and the date of the sale of the Common Stock received through
the exercise of such Option.
5. Administration of the Plan.
--------------------------
(a) Composition of the Committee. The Plan shall be
administered by the Board of Directors of the Company or a Committee which shall
consist of not less than two Directors of the Company appointed by the Board and
serving at the pleasure of the Board. All persons designated as members of the
Committee shall meet the requirements of a "Non-Employee Director" within the
meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as amended, as
found at 17 CFR ss.240.16b-3.
(b) Powers of the Committee. The Committee is authorized (but
only to the extent not contrary to the express provisions of the Plan or to
resolutions adopted by the Board) to interpret the Plan, to prescribe, amend and
rescind rules and regulations relating to the Plan, to determine the form and
content of Awards to be issued under the Plan and to make other determinations
necessary or advisable for the administration of the Plan, and shall have and
may exercise such other power and authority as may be delegated to it by the
Board from time to time. A majority of the entire Committee shall constitute a
quorum and the action of a majority of the members present at any meeting at
which a quorum is present shall be deemed the action of the Committee. In no
event may the Committee revoke outstanding Awards without the consent of the
Participant.
The President of the Company and such other officers as shall
be designated by the Committee are hereby authorized to execute written
agreements evidencing Awards on behalf of the Company and to cause them to be
delivered to the Participants. For Awards of Stock Options, such agreements
shall set forth the Option exercise price, the number of shares of Common Stock
subject to such Option, the expiration date of such Options, and such other
terms and restrictions applicable to such Award as are determined in accordance
with the Plan or the actions of the Committee.
(c) Effect of Committee's Decision. All decisions,
determinations and interpretations of the Committee shall be final and
conclusive on all persons affected thereby.
6. Eligibility for Awards. The Committee shall from time to time
------------------------
determine the officers, Directors, and employees and other persons who shall be
granted Awards under the Plan, the number of Awards to be granted to each such
Participant. In selecting Participants and in determining the number of Shares
of Common Stock to be granted to each such Participant, the Committee may
consider the nature of the prior and anticipated future services rendered by
each such Participant, each such Participant's current and potential
contribution to the Company and such other factors as the Committee may, in its
sole discretion, deem relevant. Participants who have been granted an Award may,
if otherwise eligible, be granted additional Awards.
7. Term of the Plan. The Plan shall continue in effect for a term of
----------------
ten (10) years from the Effective Date, unless sooner terminated pursuant to
Section 14 hereof. No Option shall be granted under the Plan after ten (10)
years from the Effective Date.
8. Terms and Conditions of Stock Options. Stock Options may be
-------------------------------------
granted by the Committee from time to time in its sole discretion and in
accordance with the Plan. Stock Options granted pursuant to the Plan shall be
evidenced by an instrument in such form as the Committee shall from time
4
<PAGE>
to time approve. Each Stock Option granted pursuant to the Plan shall comply
with, and be subject to, the following terms and conditions:
(a) Option Price. The price per Share at which each Stock
Option granted by the Committee under the Plan may be exercised shall not, as to
any particular Stock Option, be less than the Fair Market Value of the Common
Stock on the date that such Stock Option is granted.
(b) Payment. Full payment for each Share of Common Stock
purchased upon the exercise of any Stock Option granted under the Plan shall be
made at the time of exercise of each such Stock Option and shall be paid in cash
(in United States Dollars), Common Stock or a combination of cash and Common
Stock. Common Stock utilized in full or partial payment of the exercise price
shall be valued at the Fair Market Value at the date of exercise. The Company
shall accept full or partial payment in Common Stock only to the extent
permitted by applicable law. No Shares of Common Stock shall be issued until
full payment has been received by the Company, and no Optionee shall have any of
the rights of a stockholder of the Company until Shares of Common Stock are
issued to the Optionee.
(c) Term of Stock Option. The term of exercisability of each
Stock Option granted pursuant to the Plan shall be not more than ten (10) years
from the date each such Stock Option is granted.
(d) Exercise Generally. Except as otherwise provided by
Section 9 of the Plan or by action of the Committee at the time of the grant of
a Stock Option, Stock Options granted will be first exercisable at the rate of
20% on the one year anniversary of the date of grant and 20% annually thereafter
during such periods of service as an Employee, Director or Director Emeritus.
The Committee may impose additional conditions upon the right of any Optionee to
exercise any Stock Option granted hereunder which is not inconsistent with the
terms of the Plan.
(e) Cashless Exercise. Subject to vesting requirements, if
applicable, an Optionee who has held a Stock Option for at least six months may
engage in the "cashless exercise" of the Option. Upon a cashless exercise, an
Optionee shall give the Company written notice of the exercise of the Option
together with an order to a registered broker-dealer or equivalent third party,
to sell part or all of the Optioned Stock and to deliver enough of the proceeds
to the Company to pay the Option exercise price and any applicable withholding
taxes. If the Optionee does not sell the Optioned Stock through a registered
broker-dealer or equivalent third party, the Optionee can give the Company
written notice of the exercise of the Option and the third party purchaser of
the Optioned Stock shall pay the Option exercise price plus any applicable
withholding taxes to the Company.
(f) Transferability. A Stock Option granted pursuant to the
Plan shall be exercised during an Optionee's lifetime only by the Optionee to
whom it was granted and shall not be assignable or transferable otherwise than
by will or by the laws of descent and distribution.
9. Effect of Termination of Service, Disability, Death and Retirement
------------------------------------------------------------------
on Stock Options.
- -----------------
(a) Termination of Service. Except as may be specified by the
Committee at the time of grant of an Option, in the event that any Optionee's
service with the Company shall terminate for any reason, other than Disability,
death or Retirement, all of any such Optionee's Stock Options, and all of any
such Optionee's rights to purchase or receive Shares of Common Stock pursuant
thereto, shall automatically terminate on (A) the earlier of (i) or (ii): (i)
the respective expiration dates of any such Stock
5
<PAGE>
Options, or (ii) the expiration of not more than three (3) months after the date
of such termination of service; or (B) at such later date as is determined by
the Committee at the time of the grant of such Award based upon the Optionee's
continuing status as a Director or Director Emeritus of the Savings Bank or the
Company, but only if, and to the extent that, the Optionee was entitled to
exercise any such Stock Options at the date of such termination of service. In
the event that a Subsidiary ceases to be a Subsidiary of the Company, the
employment of all of its employees who are not immediately thereafter employees
of the Company shall be deemed to terminate upon the date such Subsidiary so
ceases to be a Subsidiary of the Company.
(b) Disability or Retirement. Except as may be specified by
the Committee at the time of grant of an Option, in the event that any
Optionee's service with the Company shall terminate as the result of the
Disability or Retirement of such Optionee, all such Stock Options shall become
immediately 100% exercisable and such Optionee may exercise any Stock Options
granted to the Optionee pursuant to the Plan at any time prior to the respective
expiration dates of any such Stock Options.
(c) Death. Except as may be specified by the Committee at the
time of grant of an Option, in the event of the death of an Optionee, any Stock
Options granted to such Optionee shall become immediately 100% exercisable and
may be exercised by the person or persons to whom the Optionee's rights under
any such Stock Options pass by will or by the laws of descent and distribution
(including the Optionee's estate during the period of administration) at any
time prior to the respective expiration dates of any such Stock Options.
(d) Stock Options Deemed Exercisable. For purposes of this
Section, any Stock Option held by any Optionee shall be considered exercisable
at the date of termination of service if any such Stock Option would have been
exercisable at such date of termination of service without regard to the
Disability or death of the Participant.
(e) Termination of Stock Options. Except as may be specified
by the Committee at the time of grant of an Option, to the extent that any Stock
Option granted under the Plan to any Optionee whose service with the Company
terminates shall not have been exercised within the applicable period set forth
in this Section, any such Stock Option, and all rights to purchase or receive
Shares of Common Stock pursuant thereto, as the case may be, shall terminate on
the last day of the applicable period.
10. Recapitalization, Merger, Consolidation, Change in Control and
--------------------------------------------------------------
Other Transactions.
- -------------------
(a) Adjustment. Subject to any required action by the
stockholders of the Company, within the sole discretion of the Committee, the
aggregate number of Shares of Common Stock for which Options may be granted
hereunder, the number of Shares of Common Stock covered by each outstanding
Option, the number of Shares subject to Stock Awards, and the exercise price per
Share of Common Stock of each such Option, shall all be proportionately adjusted
for any increase or decrease in the number of issued and outstanding Shares of
Common Stock resulting from a subdivision or consolidation of Shares (whether by
reason of merger, consolidation, recapitalization, reclassification, split-up,
combination of shares, or otherwise) or the payment of a stock dividend (but
only on the Common Stock) or any other increase or decrease in the number of
such Shares of Common Stock effected without the receipt or payment of
consideration by the Company (other than Shares held by dissenting
stockholders).
6
<PAGE>
(b) Change in Control. All outstanding Awards shall become
immediately exercisable in the event of a Change in Control of the Company, as
determined by the Committee. In the event of such a Change in Control, the
Committee and the Board of Directors will take one or more of the following
actions to be effective as of the date of such Change in Control:
(i) provide that such Options shall be assumed, or equivalent
options shall be substituted, ("Substitute Options") by the acquiring or
succeeding corporation (or an affiliate thereof), provided that: the shares of
stock issuable upon the exercise of such Substitute Options shall constitute
securities registered in accordance with the Securities Act of 1933, as amended,
("1933 Act") or such securities shall be exempt from such registration in
accordance with Sections 3(a)(2) or 3(a)(5) of the 1933 Act, (collectively,
"Registered Securities"), or in the alternative, if the securities issuable upon
the exercise of such Substitute Options shall not constitute Registered
Securities, then the Optionee will receive upon consummation of the Change in
Control transaction a cash payment for each Option surrendered equal to the
difference between (1) the Fair Market Value of the consideration to be received
for each share of Common Stock in the Change in Control transaction times the
number of shares of Common Stock subject to such surrendered Options, and (2)
the aggregate exercise price of all such surrendered Options, or
(ii) in the event of a transaction under the terms of which
the holders of the Common Stock of the Company will receive upon consummation
thereof a cash payment (the "Merger Price") for each share of Common Stock
exchanged in the Change in Control transaction, to make or to provide for a cash
payment to the Optionees equal to the difference between (A) the Merger Price
times the number of Shares of Common Stock subject to such Options held by each
Optionee (to the extent then exercisable at prices not in excess of the Merger
Price) and (B) the aggregate exercise price of all such surrendered Options in
exchange for such surrendered Options.
(c) Extraordinary Corporate Action. Notwithstanding any
provisions of the Plan to the contrary, subject to any required action by the
stockholders of the Company, in the event of any Change in Control,
recapitalization, merger, consolidation, exchange of Shares, spin-off,
reorganization, tender offer, partial or complete liquidation or other
extraordinary corporate action or event, the Committee, in its sole discretion,
shall have the power, prior or subsequent to such action or event to:
(i) appropriately adjust the number of Shares of
Common Stock subject to each Option, the Option exercise price per Share of
Common Stock, and the consideration to be given or received by the Company upon
the exercise of any outstanding Option;
(ii) cancel any or all previously granted Options,
provided that appropriate consideration is paid to the Optionee in connection
therewith; and/or
(iii) make such other adjustments in connection with
the Plan as the Committee, in its sole discretion, deems necessary, desirable,
appropriate or advisable.
(d) Acceleration. The Committee shall at all times have
the power to accelerate the exercise date of Options previously granted under
the Plan.
Except as expressly provided in Sections 10(a) and 10(b) hereof, no
Optionee shall have any rights by reason of the occurrence of any of the events
described in this Section 10.
7
<PAGE>
11. Time of Granting Options. The date of grant of an Option under the
------------------------
Plan shall, for all purposes, be the date on which the Committee makes the
determination of granting such Option. Notice of the grant of an Option shall be
given to each individual to whom an Option is so granted within a reasonable
time after the date of such grant in a form determined by the Committee.
12. Stock Awards. The Committee may make grants of Stock Awards, which
------------
shall consist of the grant of some number of Shares of Common Stock, to a
Participant upon such terms and conditions as it may determine to the extent
such terms and conditions are consistent with the following provisions:
(a) Grants of the Stock Awards. Stock Awards may only be made
in whole shares of Common Stock. Stock Awards may only be granted from Shares
reserved under the Plan and available for award at the time the Stock Award is
made to the Participant.
(b) Terms of the Stock Awards. The Committee shall determine
the dates on which Stock Awards granted to a Participant shall vest and any
terms or conditions which must be satisfied prior to the vesting of any Stock
Award or portion thereof. Any such terms or conditions shall be determined by
the Committee as of the date of grant. As promptly as practicable after a
determination is made that a Stock Award is to be made, the Committee shall
notify the Participant in writing of the grant of the Stock Award, the number of
Shares covered by the Stock Award, and the terms upon which the Shares subject
to the Stock Award may be earned. The date on which the Committee makes its
award determination or the date the Committee so notifies the Participant shall
be considered the date of grant of the Stock Awards as determined by the
Committee. The Committee shall maintain records as to all grants of Stock Awards
under the Plan. Except as otherwise provided by the terms of the Plan or by
action of the Committee at the time of the grant of the Stock Awards, the Stock
Awards will be first exercisable at the rate of 20% on the one year anniversary
of the date of grant and 20% annually thereafter during such periods of service
as an Employee, Director or Director Emeritus.
(c) Termination of Employment or Service (General). Unless
otherwise determined by the Committee, upon the termination of a Participant's
employment or service for any reason other than Retirement, Disability or death,
a Change in Control, or Termination for Cause, any Stock Awards in which the
Participant has not become vested as the date of such termination shall be
forfeited and any rights the Participant had to such Stock Awards shall become
null and void.
(d) Termination of Employment or Service (Retirement). Unless
otherwise determined by the Committee, in the event of a Participant's
Retirement, any Stock Awards in which the Participant has not become vested as
of the date of Retirement shall immediately become 100% earned and
non-forfeitable as of the Participant's date of Retirement and shall be
distributed as soon as practicable thereafter.
(e) Termination of Employment or Service (Disability or
Death). Unless otherwise determined by the Committee, in the event of a
termination of the Participant's service due to Disability or death, all
unvested Stock Awards held by such Participant shall immediately become 100%
earned and non- forfeitable as of the date of such termination and shall be
distributed as soon as practicable thereafter.
(f) Change in Control. Unless otherwise determined by the
Committee, in the event of a Change in Control, any Stock Awards in which the
Participant has not become vested as of the date of
8
<PAGE>
such Change in Control shall become immediately 100% earned and non-forfeitable
on the date of the Change in Control and shall be distributed to the Participant
as soon as practicable thereafter.
(g) Termination of Employment or Service (Termination for
Cause). In the event of the Participant's Termination for Cause, all Stock
Awards in which the Participant had not become vested as of the effective date
of such Termination for Cause shall be forfeited and any rights such Participant
had to such unvested Stock Awards shall become null and void. Termination for
Cause is defined at 12 C.F.R. 563.39(b)(l) and shall be determined within the
sole discretion of the Board.
(h) Maximum Individual Award. No individual Employee shall be
granted an amount of Stock Awards which exceeds 25% of all Stock Awards eligible
to be granted under Section 3 of the Plan. In no event shall Stock Awards
granted to non-employee Directors in the aggregate under this Plan exceed more
than 25% of the total number of Shares authorized for delivery under Section 3
of the Plan.
(i) Issuance of Certificates. As soon as practicable after the
date of grant with respect to shares of Common Stock pursuant to a Stock Award,
the Company shall cause to be issued a stock certificate, registered in the name
of the Participant to whom such Stock Award was granted, evidencing such Shares;
provided, that the Company shall not cause such a stock certificate to be issued
unless it has received a stock power duly endorsed in blank with respect to such
Shares. Each such stock certificate shall bear the following legend:
"The transferability of this certificate and the shares of
stock represented hereby are subject to the restrictions,
terms and conditions (including forfeiture provisions and
restrictions against transfer) contained in the Guaranty
Federal Bancshares, Inc. 2000 Stock Compensation Plan and
award agreement entered into between the registered owner of
such shares and Guaranty Federal Bancshares, Inc. A copy of
the Plan and award agreement is on file in the office of
Guaranty Federal Bancshares, Inc., located at 1341 West
Battlefield, Springfield, Missouri 65807.
Such legend shall not be removed until the Participant becomes vested
in such Shares pursuant to the terms of the Plan and award agreement.
(j) Non-Transferability. A Stock Award shall not be
transferable by a Participant, and during the lifetime of the Participant, Stock
Awards may only be earned by and paid to the Participant who was notified in
writing of the Stock Award by the Committee pursuant to Section 12(b). No
Participant or beneficiary shall have any right in or claim to any assets of the
Plan, nor shall the Company be subject to any claim for benefits hereunder.
(k) Payment of Dividends. A Participant or beneficiary shall
also be entitled to receive, with respect to each such Share distributed, a
payment equal to any cash dividends and the number of Shares of Common Stock
equal to any stock dividends, declared and paid with respect to a Share of the
Common Stock if the record date for determining shareholders entitled to receive
such dividends falls between the date the relevant Stock Award was granted and
the date the relevant Stock Award or installment thereof is issued. Such cash
dividend amounts shall be held in arrears and distributed to such Participant,
less applicable income tax withholding, upon the earning of the applicable Stock
Award.
9
<PAGE>
(l) Voting of Stock Awards. After a Stock Award has been
granted and such Stock Award has been issued in the form of Common Stock, but
for which the Shares covered by such Stock Award have not yet been vested and
earned to the Participant pursuant to the Plan, the Participant shall be
entitled to vote such Shares of Common Stock which the Stock Awards cover
subject to the rules and procedures adopted by the Committee for this purpose.
(m) Form of Distribution. All Stock Awards, together with any
Shares representing stock dividends, shall be distributed in the form of Common
Stock. One share of Common Stock shall be given for each Stock Award earned.
Payments representing cash dividends (and earnings thereon) shall be made in
cash. Notwithstanding anything within the Plan to the contrary, upon a Change in
Control whereby substantially all of the Common Stock of the Company shall be
acquired for cash, all Stock Awards, together with any Shares representing stock
dividends associated with Stock Awards, shall be, at the sole discretion of the
Committee, distributed as of the effective date of such Change in Control, or as
soon as administratively feasible thereafter, in the form of cash equal to the
consideration received in exchange for such Common Stock represented by such
Stock Awards.
(n) Regulatory Exceptions. No Stock Awards shall be
distributed, however, unless and until all of the requirements of all applicable
law and regulations shall have been fully complied with, as determined by the
Committee.
13. Modification of Options. At any time and from time to time, the
------------------------
Board may authorize the Committee to direct the execution of an instrument
providing for the modification of any outstanding Option, provided no such
modification, extension or renewal shall confer on the holder of said Option any
right or benefit which could not be conferred on the Optionee by the grant of a
new Option at such time, or shall not materially decrease the Optionee's
benefits under the Option without the consent of the holder of the Option,
except as otherwise permitted under Section 14 hereof.
14. Amendment and Termination of the Plan.
-------------------------------------
(a) Action by the Board. The Board may alter, suspend or
discontinue the Plan at any time within its sole discretion.
(b) Change in Applicable Law. Notwithstanding any other
provision contained in the Plan, in the event of a change in any federal or
state law, rule or regulation which would make the exercise of all or part of
any previously granted Option unlawful or subject the Company to any penalty,
the Committee may restrict any such exercise without the consent of the Optionee
or other holder thereof in order to comply with any such law, rule or regulation
or to avoid any such penalty.
15. Conditions Upon Issuance of Shares; Limitations on Option
-----------------------------------------------------------------------
Exercise; Cancellation of Option Rights.
- ----------------------------------------
(a) Shares shall not be issued with respect to any Option granted under
the Plan unless the issuance and delivery of such Shares shall comply with all
relevant provisions of applicable law, including, without limitation, the
Securities Act of 1933, as amended, the rules and regulations promulgated
thereunder, any applicable state securities laws and the requirements of any
stock exchange upon which the Shares may then be listed.
10
<PAGE>
(b) The inability of the Company to obtain any necessary
authorizations, approvals or letters of non-objection from any regulatory body
or authority deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares issuable hereunder shall relieve the Company of
any liability with respect to the non-issuance or sale of such Shares.
(c) As a condition to the exercise of an Option, the Company may
require the person exercising the Option to make such representations and
warranties as may be necessary to assure the availability of an exemption from
the registration requirements of federal or state securities law.
(d) Notwithstanding anything herein to the contrary, upon the
termination of employment or service of an Optionee by the Company or its
Subsidiaries for "cause" as defined at 12 C.F.R. 563.39(b)(1) as determined by
the Board of Directors, all Options held by such Optionee shall cease to be
exercisable as of the date of such termination of employment or service.
(e) Upon the exercise of an Option by an Optionee (or the Optionee's
personal representative), the Committee, in its sole and absolute discretion,
may make a cash payment to the Optionee, in whole or in part, in lieu of the
delivery of Shares of Common Stock. Such cash payment to be paid in lieu of
delivery of Common Stock shall be equal to the difference between the Fair
Market Value of the Common Stock on the date of the Option exercise and the
exercise price per share of the Option. Such cash payment shall be in exchange
for the cancellation of such Option. Such cash payment shall not be made in the
event that such transaction would result in liability to the Optionee or the
Company under Section 16(b) of the Securities Exchange Act of 1934, as amended,
and regulations promulgated thereunder.
16. Reservation of Shares. During the term of the Plan, the Company
---------------------
will reserve and keep available a number of Shares sufficient to satisfy the
requirements of the Plan.
17. Unsecured Obligation. No Participant under the Plan shall have
--------------------
any interest in any fund or special asset of the Company by reason of the Plan
or the grant of any Option under the Plan. No trust fund shall be created in
connection with the Plan or any grant of any Option hereunder and there shall be
no required funding of amounts which may become payable to any Participant.
18. Withholding Tax. The Company shall have the right to deduct from
----------------
all amounts paid in cash with respect to the cashless exercise of Options under
the Plan any taxes required by law to be withheld with respect to such cash
payments. Where a Participant or other person is entitled to receive Shares
pursuant to the exercise of an Option or the receipt of Shares pursuant to a
Stock Award, the Company shall have the right to require the Participant or such
other person to pay the Company the amount of any taxes which the Company is
required to withhold with respect to such Shares, or, in lieu thereof, to
retain, or to sell without notice, a number of such Shares sufficient to cover
the amount required to be withheld.
19. No Employment Rights. No Director, Employee or other person shall
---------------------
have a right to be selected as a Participant under the Plan. Neither the Plan
nor any action taken by the Committee in administration of the Plan shall be
construed as giving any person any rights of employment or retention as an
Employee, Director or in any other capacity with the Company, the Savings Bank
or other Subsidiaries.
11
<PAGE>
20. Governing Law. The Plan shall be governed by and construed in
-------------
accordance with the laws of the State of Missouri, except to the extent that
federal law shall be deemed to apply.
12
<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-30-2000
<PERIOD-END> MAR-31-2000
<CASH> 1,675
<INT-BEARING-DEPOSITS> 4,717
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 7,827
<INVESTMENTS-CARRYING> 8,569
<INVESTMENTS-MARKET> 9,111
<LOANS> 292,743
<ALLOWANCE> 2,475
<TOTAL-ASSETS> 328,018
<DEPOSITS> 144,855
<SHORT-TERM> 121,150
<LIABILITIES-OTHER> 4,141
<LONG-TERM> 0
0
0
<COMMON> 625
<OTHER-SE> 57,247
<TOTAL-LIABILITIES-AND-EQUITY> 328,018
<INTEREST-LOAN> 16,241
<INTEREST-INVEST> 630
<INTEREST-OTHER> 475
<INTEREST-TOTAL> 17,346
<INTEREST-DEPOSIT> 4,560
<INTEREST-EXPENSE> 9,407
<INTEREST-INCOME-NET> 7,939
<LOAN-LOSSES> 135
<SECURITIES-GAINS> (5)
<EXPENSE-OTHER> 4,731
<INCOME-PRETAX> 4,075
<INCOME-PRE-EXTRAORDINARY> 2,600
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,600
<EPS-BASIC> 0.51
<EPS-DILUTED> 0.51
<YIELD-ACTUAL> 3.47
<LOANS-NON> 1,124
<LOANS-PAST> 1,124
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 2,349
<CHARGE-OFFS> 9
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 2,475
<ALLOWANCE-DOMESTIC> 2,475
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
