SECURITIES AND EXCHANGE COMMISSION
[ ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
For the fiscal year ended
[ X ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
For the transition period from July 1, 2003 to December 31, 2003
Commission File Number: 0-23325
GUARANTY FEDERAL BANCSHARES, INC.
(Exact Name of Registrant as Specified in Its Charter)
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Delaware |
43-1792717 |
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(State or Other Jurisdiction of Incorporation |
(I.R.S. Employer Identification No.) |
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or Organization) |
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1341 West Battlefield, Springfield, Missouri |
65807 |
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(Address of Principal Executive Offices) |
(Zip Code) |
Registrant's telephone number, including area code: (417) 520-4333
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.10 per share
Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.[ X ]
Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).
The aggregate market value of the voting stock held by non-affiliates of the Registrant, based on the average bid and asked prices of the Registrant's Common Stock as quoted on the National Market of The Nasdaq Stock Market on June 30, 2003, was $48.1 million. As of March 30, 2004 there were 2,998,897 shares of the Registrant's Common Stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
1. Portions of the Annual Report to Stockholders (the "2003 Annual Report") for the transition period ended December 31, 2003 (Parts I and II).
2. Portions of the Proxy Statement for the Annual Meeting of Stockholders (the "Proxy Statement") to be held on May 19, 2004 (Part III).
GUARANTY FEDERAL BANCSHARES, INC.
TABLE OF CONTENTS
GUARANTY FEDERAL BANCSHARES, INC. (THE "COMPANY") MAY FROM TIME TO TIME MAKE WRITTEN OR ORAL "FORWARD-LOOKING STATEMENTS", INCLUDING STATEMENTS CONTAINED IN THE COMPANY'S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION (INCLUDING THIS ANNUAL REPORT ON FORM 10-K AND THE EXHIBITS THERETO), IN ITS REPORTS TO STOCKHOLDERS AND IN OTHER COMMUNICATIONS BY THE COMPANY, WHICH ARE MADE IN GOOD FAITH BY THE COMPANY PURSUANT TO THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. WHEN USED IN THIS ANNUAL REPORT ON FORM 10-K, WORDS SUCH AS "ANTICIPATES," "ESTIMATES," "BELIEVES," "EXPECTS," AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY SUCH FORWARD-LOOKING STATEMENTS BUT ARE NOT THE EXCLUSIVE MEANS OF IDENTIFYING SUCH STATEMENTS.
THESE FORWARD-LOOKING STATEMENTS INVOLVE RISKS AND UNCERTAINTIES, SUCH AS STATEMENTS OF THE COMPANY'S PLANS, OBJECTIVES, EXPECTATIONS, ESTIMATES AND INTENTIONS, THAT ARE SUBJECT TO CHANGE BASED ON VARIOUS IMPORTANT FACTORS (SOME OF WHICH ARE BEYOND THE COMPANY'S CONTROL). THE FOLLOWING FACTORS, AMONG OTHERS, COULD CAUSE THE COMPANY'S FINANCIAL PERFORMANCE TO DIFFER MATERIALLY FROM THE PLANS, OBJECTIVES, EXPECTATIONS, ESTIMATES AND INTENTIONS EXPRESSED IN SUCH FORWARD-LOOKING STATEMENTS: THE STRENGTH OF THE UNITED STATES ECONOMY IN GENERAL AND THE STRENGTH OF THE LOCAL ECONOMIES IN WHICH THE COMPANY CONDUCTS OPERATIONS; THE EFFECTS OF, AND CHANGES IN, TRADE, MONETARY AND FISCAL POLICIES AND LAWS, INCLUDING INTEREST RATE POLICIES OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, INFLATION, INTEREST RATES, MARKET AND MONETARY FLUCTUAT
IONS; THE TIMELY DEVELOPMENT OF AND ACCEPTANCE OF NEW PRODUCTS AND SERVICES OF THE COMPANY AND THE PERCEIVED OVERALL VALUE OF THESE PRODUCTS AND SERVICES BY USERS, INCLUDING THE FEATURES, PRICING AND QUALITY COMPARED TO COMPETITORS' PRODUCTS AND SERVICES; THE WILLINGNESS OF USERS TO SUBSTITUTE COMPETITORS' PRODUCTS AND SERVICES FOR THE COMPANY'S PRODUCTS AND SERVICES; THE SUCCESS OF THE COMPANY IN GAINING REGULATORY APPROVAL OF ITS PRODUCTS AND SERVICES, WHEN REQUIRED; THE IMPACT OF CHANGES IN FINANCIAL SERVICES' LAWS AND REGULATIONS (INCLUDING LAWS CONCERNING TAXES, BANKING, SECURITIES AND INSURANCE); TECHNOLOGICAL CHANGES; ACQUISITIONS; CHANGES IN CONSUMER SPENDING AND SAVING HABITS; AND THE SUCCESS OF THE COMPANY AT MANAGING THE RISKS RESULTING FROM THESE FACTORS.
THE COMPANY CAUTIONS THAT THE LISTED FACTORS ARE NOT EXCLUSIVE. THE COMPANY DOES NOT UNDERTAKE TO UPDATE ANY FORWARD-LOOKING STATEMENT, WHETHER WRITTEN OR ORAL, THAT MAY BE MADE FROM TIME TO TIME BY OR ON BEHALF OF THE COMPANY.
The Company is a Delaware-chartered corporation that was created in September 1997 at the direction of Guaranty Federal Savings Bank (the "Bank"). The Company became a unitary savings and loan holding company for the Bank on December 30, 1997, in connection with a plan of conversion and reorganization involving the Bank and its then existing mutual holding company. The mutual holding company structure had been created in April 1995 at which time more than a majority of the shares of the Bank were issued to the mutual holding company and the remainder were sold in a public offering. In connection with the conversion and reorganization on December 30, 1997, the shares of the Bank held by the mutual holding company were extinguished along with the mutual holding company and the shares of the Bank held by the public were exchanged for shares of
the Company. Shares of the Company were issued on December 30, 1997.
On June 27, 2003, the Bank converted to a state-chartered trust company with banking powers, and the Company became a bank holding company. On this date, the name of the Bank was changed from Guaranty Federal Savings Bank to Guaranty Bank. The primary activity of the Company is to oversee its investment in the Bank. The Company engages in few other activities. For this reason, unless otherwise specified, references to the Company include operations of the Bank. Further, information in a chart or table based on Bank only data is identical to or immaterially different from information that would be provided on a consolidated basis.
In 2003, the Company determined to change its fiscal year end from June 30 to a calendar year end of December 31. As a result, the Company is reporting a six month transition period ended December 31, 2003 in order to change to this new calendar year end.
The Bank's principal business has been, and continues to be, attracting retail deposits from the general public and investing those deposits, together with funds generated from operations, in both permanent and construction of one-to four-family residential mortgage loans, multi-family residential mortgage loans, commercial real estate loans, and consumer and other loans. The Bank also invests in mortgage-backed securities, U.S. Government and federal agency securities and other marketable securities. The Bank's revenues are derived principally from interest on its loans and other investments and fees charged for services provided, and 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 in
terest expense on interest-bearing liabilities. The Bank's primary sources of funds are: deposits; borrowings; amortization and prepayments of loan principal; and amortizations, prepayments and maturing of mortgage-backed securities.
The Bank is regulated by the Missouri Division of Finance and its deposits are insured by the Savings Association Insurance Fund ("SAIF") of the Federal Deposit Insurance Corporation (the "FDIC").
The Bank's primary market area is Greene County, which is in the southwestern corner of Missouri and includes the city of Springfield, Missouri. There is a large regional health care presence with two large regional hospitals employing over 14,000. There also are four accredited colleges and one major university with total enrollment approaching 25,000. Part of Greene County's growth can be attributed to its proximity to Branson, Missouri, which has developed a strong tourism industry related to country music and entertainment. Branson is located 30 miles south of Springfield, and receives between five and six million tourists each year, many of whom pass through Springfield.
Set forth below is selected data relating to the composition of the Bank’s loan portfolio at the
dates indicated:
Composition of Loan Portfolio |
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As of December 31, |
As of June 30, |
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2003 |
2003 |
2002 |
2001 |
2000 |
1999 |
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$ |
% |
$ |
% |
$ |
% |
$ |
% |
$ |
% |
$ |
% |
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(Dollars in Thousands) |
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Mortgage loans (includes loans held for sale): |
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One to four family |
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$ 129,477 |
37% |
$ 144,404 |
40% |
149,443 |
44% |
189,436 |
55% |
198,155 |
63% |
178,680 |
63% |
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Multi-family |
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44,242 |
13% |
41,022 |
11% |
44,055 |
13% |
42,641 |
12% |
39,146 |
12% |
35,795 |
13% |
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Construction |
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49,814 |
14% |
64,464 |
18% |
49,807 |
15% |
55,317 |
16% |
41,372 |
13% |
38,605 |
14% |
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Commercial real estate |
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72,105 |
21% |
71,046 |
19% |
58,434 |
17% |
43,893 |
13% |
26,559 |
9% |
20,771 |
7% |
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Total mortgage loans |
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295,638 |
86% |
320,936 |
88% |
301,739 |
89% |
331,287 |
96% |
305,232 |
97% |
273,851 |
97% |
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Commercial business loans |
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24,618 |
7% |
18,967 |
5% |
8,358 |
2% |
5,511 |
1% |
761 |
0% |
544 |
0% |
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Savings account loans |
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268 |
0% |
282 |
0% |
367 |
0% |
273 |
0% |
461 |
0% |
573 |
0% |
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Automobile |
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3,374 |
1% |
3,438 |
1% |
3,395 |
1% |
2,260 |
1% |
1,941 |
1% |
2,016 |
1% |
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Other |
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21,799 |
6% |
21,766 |
6% |
27,313 |
8% |
8,040 |
2% |
7,118 |
2% |
5,389 |
2% |
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Total consumer and other loans |
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50,059 |
14% |
44,453 |
12% |
39,433 |
11% |
16,084 |
4% |
10,281 |
3% |
8,522 |
3% |
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Total loans |
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345,697 |
100% |
365,389 |
100% |
341,172 |
100% |
347,371 |
100% |
315,513 |
100% |
282,373 |
100% |
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Less: |
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Loans in process |
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9,425 |
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25,539 |
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18,326 |
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24,212 |
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16,668 |
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15,466 |
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Deferred loan fees/costs, net |
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237 |
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211 |
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230 |
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268 |
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164 |
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180 |
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Unearned discounts |
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19 |
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26 |
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50 |
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88 |
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108 |
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109 |
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Allowance for loan losses |
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3,886 |
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2,775 |
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2,650 |
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2,697 |
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2,520 |
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2,349 |
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Total Loans, Net |
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$ 332,130 |
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$ 336,838 |
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319,916 |
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320,106 |
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296,053 |
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264,269 |
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The following table sets forth the dollar amount, before deductions for unearned discounts, deferred loan costs and allowance for loan losses, as of December 31, 2003 of all loans due after December 2004, which have pre-determined interest rates and which have adjustable interest rates.
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Fixed Rates |
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Adjustable Rates |
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Total |
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% ARM |
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(Dollars in Thousands) |
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One-to four-family |
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$ |
24,784 |
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91,539 |
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116,323 |
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79 |
% |
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Multi-family |
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18,473 |
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22,798 |
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41,271 |
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55 |
% |
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Construction |
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657 |
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4,388 |
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5,045 |
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87 |
% |
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Commercial real estate |
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14,253 |
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40,787 |
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55,040 |
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74 |
% |
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Consumer & other loans |
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11,788 |
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22,744 |
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34,532 |
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66 |
% |
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Total loans (1) |
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$ |
69,955 |
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182,256 |
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252,211 |
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72 |
% |
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(1) Before deductions for unearned discounts, deferred loan fees/costs and |
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allowances for loan losses. |
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The following table sets forth the maturity of the Bank's loan portfolio as of December 31, 2003. The table shows loans that have adjustable-rates as due in the period during which they contractually mature. The table does not include prepayments or scheduled principal amortization.
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Loan Maturities |
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Due in One Year or Less |
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Due After One Through Five Years |
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