GUARANTY FEDERAL BANCSHARES INC - 10-Q Quarterly Report

. 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 June 30, 2004

[ ] 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 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.

Class	Outstanding at August 10, 2004

Common Stock, Par Value $0.10	2,995,192 Shares

GUARANTY FEDERAL BANCSHARES, INC.
GUARANTY FEDERAL BANCSHARES, INC.

TABLE OF CONTENTS
Item		Page
PART I. Financial Information

1. Financial Statements 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 Consolidated Financial Statements	8

2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		10

3. Quantitative and Qualitative Disclosures about Market Risk		15

4. Control and Procedures		17

PART II. Other Information

1. Legal Proceedings		18

2. Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities		18

3. Defaults Upon Senior Securities		18

4. Submission of Matters to a Vote of Security Holders		18

5. Other Information		19

6. Exhibits and Reports on Form 8-K		19

Signatures

PART I

Item 1. Financial Statements

GUARANTY FEDERAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
JUNE 30, 2004 (UNAUDITED) AND DECEMBER 31, 2003

ASSETS	6/30/04			12/31/03

Cash	$	10,461,775			20,686,276
Interest-bearing deposits in other financial institutions		230,153			1,970,518

Cash and cash equivalents		10,691,928			22,656,794
Available-for-sale securities		14,993,857			14,863,826
Held-to-maturity securities		1,508,797			1,867,594
Stock in Federal Home Loan Bank, at cost		5,942,500			5,294,200
Mortgage loans held for sale		1,564,767			1,268,064
Loans receivable, net of allowance for loan losses of
June 30, 2004 - $4,132,755 - December 31, 2003 - $3,886,137		364,686,594			330,861,875
Accrued interest receivable:
Loans		1,285,624			1,242,683
Investments		62,895			63,045
Prepaid expenses and other assets		2,448,380			2,057,195
Foreclosed assets held for sale		103,892			5,975
Premises and equipment		6,353,608			6,576,003

	$	409,642,842			386,757,254


LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES
Deposits	$	258,812,782			237,130,744
Federal Home Loan Bank advances		108,086,000			108,836,948
Securities sold under agreements to repurchase		1,036,268			738,399
Advances from borrowers for taxes and insurance		772,648			259,267
Accrued expenses and other liabilities		362,175			308,497
Accrued interest payable		165,111			200,770
Dividend payable		432,899			432,513
Income taxes payable		36,317			227,495
Deferred income taxes		634,010			644,500

		370,338,210			348,779,133

STOCKHOLDERS' EQUITY
Common Stock:
$0.10 par value; authorized 10,000,000 shares;
issued; June 30, 2004 - 6,461,562 shares;
December 31, 2003 - 6,428,902 shares		646,156			642,890
Additional paid-in capital		51,850,114			51,330,202
Unearned ESOP shares		(1,914,930	)		(2,030,930	)
Retained earnings, substantially restricted		31,037,096			29,919,695
Accumulated other comprehensive income
Unrealized appreciation on available-for-sale securities,
net of income taxes; June 30, 2004 - $1,614,814;
December 31, 2003 - $1,565,830		2,749,549			2,666,143

		84,367,985			82,528,000
Treasury stock, at cost; June 30, 2004 - 3,463,186 shares;
December 31, 2003 - 3,436,650 shares		(45,063,353	)		(44,549,879	)

		39,304,632			37,978,121

	$	409,642,842			386,757,254

GUARANTY FEDERAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2004 AND 2003 (UNAUDITED)


	Three months ended					Six months ended

	6/30/2004		6/30/2003			6/30/2004			6/30/2003

INTEREST INCOME
Loans	$	4,733,012		4,992,717			9,452,159			10,101,572
Investment securities		77,838		85,749			146,020			188,075
Other		61,299		108,581			115,087			201,877

		4,872,149		5,187,047			9,713,266			10,491,524

INTEREST EXPENSE
Deposits		1,108,367		1,291,158			2,262,199			2,681,270
Federal Home Loan Bank advances		825,399		1,288,122			1,720,977			2,675,271
Other		1,034		1,059			1,922			2,296

		1,934,800		2,580,339			3,985,098			5,358,837

NET INTEREST INCOME		2,937,349		2,606,708			5,728,168			5,132,687
PROVISION FOR LOAN LOSSES		225,000		150,000			413,830			405,000

NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES		2,712,349		2,456,708			5,314,338			4,727,687

NONINTEREST INCOME
Service charges		444,541		467,806			885,136			894,135
Late charges and other fees		140,200		(94,490	)		213,830			124,875
Gain on sale of investment securities		171,456		-			349,413			-
Gain on sale of loans		76,499		471,184			198,111			874,817
Income (loss) on foreclosed assets		969		(6,298	)		(5,018	)		(9,035	)
Other income		42,968		5,887			85,424			51,803

		876,633		844,089			1,726,896			1,936,595