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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, 2003


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

(State or other jurisdiction of incorporation or organization)


43-1792717

(IRS Employer Identification No.)


1341 West Battlefield

Springfield, Missouri, 65807

(Address of principal executive offices)


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 by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).


Yes        No   X    

   


Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.  



As of May 8, 2003, there were 2,998,548 shares of the registrant’s Common Stock, $0.10 par value per share, outstanding.







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  Stockholders’ Equity

 

5

  

 

                  Statements of Cash Flows

 

7

  

 

                  Notes to Condensed 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

 

15

   

4.  Controls and Procedures

 

17

   

PART II. Other Information

  
   

1.  Legal Proceedings

 

18

   

2.  Changes in Securities and Use of  Proceeds

 

18

   

3.  Defaults Upon Senior Securities

 

18

   

4.  Submission of Matters to Vote of Common Stockholders

 

18

   

5.  Other Information

 

18

   

6.  Exhibits and Reports on Form 8-K

 

18

   

Signatures

  
   

Certification of the Principal Executive Officer

  
   

Certification of the Principal Financial Officer

  






2

PART I

Item 1. Financial Statements

GUARANTY FEDERAL BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

MARCH 31, 2003 (UNAUDITED) AND JUNE 30, 2002

    

ASSETS

3/31/03

 

6/30/02

 Cash

 $           3,339,739

 

              3,251,579

 Interest-bearing deposits in other financial institutions

              9,850,636

 

            13,711,923

 Cash and cash equivalents

            13,190,375

 

            16,963,502

 Available-for-sale securities  

            13,617,120

 

            16,463,460

 Held-to-maturity securities  

              2,487,072

 

              3,219,091

 Stock in Federal Home Loan Bank, at cost

              8,600,400

 

              8,600,400

 Mortgage loans held for sale

              8,108,624

 

              3,131,138

 Loans receivable, net of allowance for loan losses;  

   

      3/31/03 - $2,802,756; 6/30/02 $2,649,872  

          319,327,071

 

          316,785,118

 Accrued interest receivable:

   

 Loans

              1,397,530

 

              1,569,260

 Investments

                   74,567

 

                   85,251

 Prepaid expenses and other assets  

              1,846,841

 

              1,693,760

 Foreclosed assets held for sale   

                   70,057

 

                 683,329

 Premises and equipment  

              6,906,079

 

              7,356,098

 

 $       375,625,736

 

          376,550,407

LIABILITIES AND STOCKHOLDERS' EQUITY

   

 

   

 LIABILITIES

   

 Deposits  

 $       230,627,315

 

          225,283,994

 Federal Home Loan Bank advances  

          104,782,467

 

          111,083,163

 Securities sold under agreements to repurchase

                 735,914

 

              1,093,074

 Advances from borrowers for taxes and insurance

                 655,387

 

              1,048,297

 Accrued expenses and other liabilities

                 176,437

 

                 103,993

 Accrued interest payable

                 825,366

 

                 759,099

 Dividend payable

                 418,239

 

                 347,656

 Income taxes payable

                 410,548

 

                 163,897

 Deferred income taxes  

                 827,708

 

              1,232,357

 

          339,459,381

 

          341,115,530

 STOCKHOLDERS' EQUITY

   

 Common stock:

   

 $0.10 par value; authorized 10,000,000 shares;

   

 issued; 3/31/03 - 6,416,048 shares, 6/30/02 - 6,365,404 shares

                 641,605

 

                 636,540

 Additional paid-in capital

            50,753,479

 

            49,842,032

 Unearned ESOP shares

             (2,219,930)

 

             (2,406,070)

 Retained earnings, substantially restricted  

            28,765,392

 

            27,372,935

 Accumulated other comprehensive income

   

 Unrealized appreciation on available-for-sale securities,

   

 net of income taxes;  3/31/03 - $1,292,763, 6/30/02 - $1,731,122

              2,201,191

 

              2,947,587

 

            80,141,737

 

            78,393,024

 Treasury stock, at cost;  3/31/03 - 3,399,971 shares, 6/30/02 - 3,333,089 shares

           (43,975,382)

 

           (42,958,147)

 

            36,166,355

 

            35,434,877

 

 $       375,625,736

 

          376,550,407

   

   


See Notes to Condensed Consolidated Financial Statements

3


GUARANTY FEDERAL BANCSHARES, INC.

 CONSOLIDATED STATEMENTS OF INCOME

 THREE MONTHS AND NINE MONTHS ENDED MARCH 31, 2003 AND 2002 (UNAUDITED)

        
 

 Three months ended

 

 Nine months ended

 

3/31/03

 

3/31/02

 

3/31/03

 

3/31/02

 INTEREST INCOME

       

 Loans

 $     5,108,855

 

        5,814,637

 

      15,935,674

 

      18,334,644

 Investment securities

           102,326

 

           124,568

 

           333,396

 

           508,516

 Other

             93,296

 

           211,435

 

           325,603

 

           545,563

      Total Interest Income

        5,304,477

 

        6,150,640

 

      16,594,673

 

      19,388,723

 INTEREST EXPENSE

   

 

   

    

 Deposits

        1,390,112

 

        1,788,768

 

        4,511,287

 

        5,412,180

 Federal Home Loan Bank advances

        1,387,149

 

        1,533,044

 

        4,346,362

 

        5,521,305

 Other

               1,237

 

               5,094

 

               6,425

 

             27,276

      Total Interest Expense

        2,778,498

 

        3,326,906

 

        8,864,074

 

      10,960,761

 Net Interest Income

        2,525,979

 

        2,823,734

 

        7,730,599

 

        8,427,962

 Provision for Loan Losses

           255,000

 

             66,000

 

           460,000

 

           216,000

 Net Interest Income after

   

   

   

    

      Provision for Loan Losses

        2,270,979

 

        2,757,734

 

        7,270,599

 

        8,211,962

 NONINTEREST INCOME (LOSS)

 

 

 

    

 Service charges

           426,329

 

           375,755

 

        1,310,461

 

        1,118,174

 Late charges and other fees

           219,365

 

             39,345

 

           284,603

 

             98,312

 Gain on sale of investment securities

                     -   

 

           218,141

 

                       -

 

           585,052

 Gain on sale of loans

           403,633

 

           157,970

 

        1,072,853

 

           675,911

 Income (loss) on foreclosed assets

              (2,737)

 

                 (673)

 

             17,128

 

                  188

 Other income

             45,916

 

             58,253

 

           159,195

 

           179,405

      Total Noninterest Income

        1,092,506

 

           848,791

 

        2,844,240

 

        2,657,042

 NONINTEREST EXPENSE

   

 

 

    

 Salaries and employee benefits

        1,176,074

 

        1,257,596

 

        3,414,857

 

        3,484,973

 Occupancy

           330,105

 

           388,140

 

        1,003,952

 

        1,125,747

 SAIF deposit insurance premiums

               9,352

 

               8,278

 

             28,768

 

             25,643

 Data processing fees

           107,696

 

           146,667

 

           402,672

 

           371,541

 Advertising

             57,360

 

             91,735

 

           161,570

 

           277,318

 Other expense

           370,391

 

           472,224

 

        1,099,137

 

        1,465,108

      Total Noninterest Expense

        2,050,978

 

        2,364,640

 

        6,110,956

 

        6,750,330

 Income Before Income Taxes

        1,312,507

 

        1,241,885

 

        4,003,883

 

        4,118,674

 Provision for Income Taxes

           427,824

 

           424,328

 

        1,355,170

 

        1,399,349

 NET INCOME

           884,683

 

           817,557

 

        2,648,713

 

        2,719,325

 OTHER COMPREHENSIVE LOSS

   

      

 Unrealized depreciation on  

   

      

      available-for-sale securities, net of income taxes  

 

      

      of ($239,674), ($113,742), ($438,359) and ($449,684),

 

      

      respectively  

          (408,094)

 

          (194,741)

 

          (746,396)

 

          (766,750)

 COMPREHENSIVE INCOME

 $        476,589

 

           622,816

 

        1,902,317

 

        1,952,575

 BASIC EARNINGS PER SHARE

 $              0.32

 

                 0.22

 

                 0.95

 

                 0.72

 DILUTED EARNINGS PER SHARE

 $              0.31

 

                 0.21

 

                 0.93

 

                 0.71

        



See Notes to Condensed Consolidated Financial Statements

4














GUARANTY FEDERAL BANCSHARES, INC.

 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

 NINE MONTHS ENDED MARCH 31, 2003 (UNAUDITED)

   

  

 

   

   

   

 Common Stock

 Additional Paid-In Capital

 Unearned ESOP Shares

 Retained Earnings

 Accumulated Other Comprehensive Income

Unrealized Appreciation  on Available-for-Sale Securities, Net

 Treasury Stock

 Total

        

 Balance, July 1, 2002

 $     636,540

    49,842,032

      (2,406,070)

    27,372,935

                       2,947,587

    (42,958,147)

      35,434,877

 Net income

                    -

                     -

                       -

      2,648,713

                                      -

                      -

        2,648,713

 Dividends on common stock,

       

 ($0.15 per share on 2,781,315 shares,

       

       $0.15 per share on 2,805,469 shares &

       

       $0.15 per share on 2,788,261 shares)

                    -

                     -

                       -

    (1,256,256)

                                      -

                      -

      (1,256,256)

 Stock award plans

                    -

         279,332

                       -

                    -

                                      -

                      -

           279,332

 Stock options exercised

            5,065

         543,852

                       -

                    -

                                      -

                      -

           548,917

 Release of ESOP shares

                    -

           88,263

           186,140

                    -

                                      -

                      -

           274,403

 Treasury stock purchased

                    -

                     -

                       -

                    -

                                      -

      (1,017,235)

      (1,017,235)

 Change in unrealized appreciation on

       

 available-for-sale securities, net of

 

   

     

 income taxes of  ($438,359)

                    -

                     -

                       -

                    -

                        (746,396)

                      -

         (746,396)

 Balance, March 31, 2003

 $     641,605

    50,753,479

      (2,219,930)

    28,765,392

                       2,201,191

    (43,975,382)

      36,166,355

   

   

   

 

   

   

 

   













See Notes to Condensed Consolidated Financial Statements

5



GUARANTY FEDERAL BANCSHARES, INC.

 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

 NINE MONTHS ENDED MARCH 31, 2002 (UNAUDITED)

   

  

 

   

   
 

 Common Stock

 Additional Paid-In Capital

 Unearned ESOP Shares

 Retained Earnings

 Accumulated Other Comprehensive Income

Unrealized Appreciation  on Available-for-Sale Securities, Net

 Treasury Stock

 Total

        

 Balance, July 1, 2001

 $     626,840

    48,451,515

      (2,640,800)

    25,951,537

                       3,948,203

    (26,131,504)

      50,205,791

 Net income

                    -

                     -

                       -

      2,719,325

                                      -

                      -

        2,719,325

 Dividends on common stock,

      

   

 ($0.25 per share on 3,800,279 shares &

       

       $0.25 per share on 3,495,430 shares)

                    -

                     -

                       -

    (1,823,928)

                                      -

                      -

      (1,823,928)

 Stock award plans

                    -

         286,757

                       -

                    -

                                      -

                      -

           286,757

 Stock options exercised

            8,701

         819,405

                       -

                    -

                                      -

                      -

           828,106

 Release of ESOP shares

                    -

           60,632

           172,230

                    -

                                      -

                      -

           232,862

 Treasury stock purchased

                    -

                     -

                       -

                    -

                                      -

      (6,035,159)

      (6,035,159)

 Change in unrealized appreciation on

      

   

 available-for-sale securitites, net of

 

   

    

   

 income taxes of  ($449,684)

                    -

                     -

                       -

                    -

                        (766,750)

                      -

         (766,750)

 Balance, March 31, 2002

 $     635,541

    49,618,309

      (2,468,570)

    26,846,934

                       3,181,453

    (32,166,663)

      45,647,004

        












See Notes to Condensed Consolidated Financial Statements

6









GUARANTY FEDERAL  BANCSHARES, INC

 CONSOLIDATED STATEMENTS OF CASH FLOWS

 NINE MONTHS ENDED MARCH 31, 2003 AND 2002 (UNAUDITED)

  

3/31/03

 

3/31/02

 CASH FLOWS FROM OPERATING ACTIVITIES

    

 Net income

 

 $          2,648,713

 

        2,719,325

 Items not requiring (providing) cash:

    

 Deferred income taxes

 

                  33,710

 

           176,957

 Depreciation

 

                597,260

 

           703,160

 Provision for loan losses

 

                460,000

 

           216,000

 Gain on loans and investment securities

 

           (1,072,853)

 

      (1,260,963)

 Gain on sale of foreclosed assets

 

                (23,828)

 

             (4,340)

 Amortization of deferred income, premiums and discounts

 

                (59,125)

 

           (37,430)

 RRP/RSP expense

 

                265,407

 

           302,274

 Origination of loans held for sale

 

         (54,439,908)

 

    (51,212,246)

 Proceeds from sale of loans held for sale

 

           50,535,275

 

      51,257,520

 Release of ESOP shares

 

                274,403

 

           232,862

 Changes in:

 

   

 

   

 Accrued interest receivable

 

                182,414

 

           514,781

 Prepaid expenses and other assets

 

              (153,081)

 

         (619,545)

 Accounts payable and accrued expenses

 

                138,711

 

             13,855

 Income taxes payable

 

                258,707

 

           213,471

            Net cash provided by (used in) operating activities

 

              (354,195)

 

        3,215,681

 CASH FLOWS FROM INVESTING ACTIVITIES

    

 Net (increase) decrease in loans

 

           (3,238,573)

 

      17,276,322

 Principal payments on available-for-sale securities

 

                172,835

 

        1,714,347

 Principal payments on held-to-maturity securities

 

                746,958

 

        1,026,325

 Purchase of premises and equipment

 

              (147,241)

 

         (332,119)

 Purchase of available-for-sale securities

 

           (4,471,239)