Guaranty Federal Bancshares, Inc. Announces Preliminary First Quarter 2013 Financial Results

Guaranty Federal Bancshares, Inc. Announces Preliminary First Quarter 2013
Financial Results

SPRINGFIELD, Mo., April 18, 2013 (GLOBE NEWSWIRE) -- Guaranty Federal
Bancshares, Inc., (Nasdaq:GFED), the holding company (the "Company") for
Guaranty Bank, today announces the following results for its first quarter
ended March 31, 2013.

First Quarter 2013 Financial Highlights

  *Diluted earnings per common share for the quarter increased to $0.25
    compared to $0.20 per common share for the same quarter in 2012.
  *Net income increased to $953,000 for the quarter compared to $834,000 for
    the same quarter in 2012.
  *Annualized return on average assets increased to .59% for the quarter
    compared to .52% for the same quarter in 2012.
  *Annualized return on average equity increased to 7.47% for the quarter
    compared to 6.08% for the same quarter in 2012.
  *Transaction deposit account balances as of March 31, 2013 have increased
    $14.1 million, or 4%, since December 31, 2012.
  *Long-term borrowings (classified as non-core funding liabilities)
    decreased $15.1 million as of March 31, 2013 compared to December 31,
  *Book value per common share was $14.49 as of March 31, 2013, an increase
    of $.15 as compared to December 31, 2012.

Net income for the quarter ended March 31, 2013 was $953,000 as compared to
$834,000 for the same quarter in 2012. After preferred stock dividends and
accretion, diluted earnings per common share was $0.25 for the quarter, an
increase from the $0.20 per diluted common share during the same quarter in

The following were key issues that contributed to the first quarter financial
results as compared to the same quarter in 2012:

  Net interest income – One of the Company's primary objectives over the last
  several years has been to improve net interest margin. A weakened economy,
  increased regulation and a historically low interest rate environment have
  made it difficult to increase earning assets, especially in the loan
  portfolio.Total net loans have declined $15.2 million since December 31,
  2012 which has had a negative impact on interest income and net interest
  margin.Despite the decline in loans, net interest income remains steady
  quarter over quarter due to the Company's efforts in growing core deposits
  and its management of interest bearing liabilities.The average cost of
  funds for the first quarter was 1.03% compared to 1.36% for the same quarter
  in 2012.The Company has benefited from the continued repricing of most of
  its deposit products throughout 2012 and the reduction in higher cost
  wholesale funding balances (primarily Federal Home Loan Bank advances).

  Non-interest income – Non-interest income increased $173,000 during the
  quarter due to several factors.The Company's mortgage division continues to
  produce strong volume and income. Gains on sales of loans in the secondary
  market increased $70,000 for the period compared to the prior year
  quarter.Also, the Company recognized gains of $89,000 on various
  investments, an increase of $51,000 over the prior year quarter.Another
  noteworthy item for the quarter was the loss of $72,000 that was recognized
  on foreclosed assets, representing a $29,000 decline compared to the same
  quarter in 2012.

  Non-interest expense – Non-interest expense increased $378,000 over the
  prior year quarter.The primary factor was a charge of $231,000 relating to
  losses on three customer deposit accounts. This is considered a one-time
  charge and the Company has made a claim to its insurance carrier for a
  partial recovery.Salaries and employee benefits have also increased $57,000
  due to normal pay increases of existing staff and increased health care
  costs over the prior year quarter.

  Provision for loan loss expense and allowance for loan losses –Based on its
  reserve analysis and methodology, the Company recorded a provision for loan
  loss expense of $400,000 during the quarter, a decrease from the $900,000
  recognized in the prior year quarter.The allowance for loan losses as of
  March 31, 2013 was 1.76% of gross loans outstanding (excluding mortgage
  loans held for sale) compared to 1.83% as of December 31, 2012.

  Non-performing assets – The Company experienced a small improvement in
  nonperforming assets which were $19.6 million as of March 31, 2013,
  representing a decrease of $300,000 from December 31, 2012.Nonperforming
  assets as a percentage of total assets remained at 3.01% as of March 31,
  2013, no change from December 31, 2012.Reducing non-performing assets has
  been and will continue to be a primary focus of the Company.

Non-Generally Accepted Accounting Principle (GAAP) Financial Measures

In addition to the GAAP financial results presented in this press release, the
Company presents non-GAAP financial measures discussed below.These non-GAAP
measures are provided to enhance investors' overall understanding of the
Company's current financial performance.Additionally, Company management
believes that this presentation enables meaningful comparison of financial
performance in various periods.However, the non-GAAP financial results
presented should not be considered a substitute for results that are presented
in a manner consistent with GAAP.A limitation of the non-GAAP financial
measures presented is that the adjustments concern gains, losses or expenses
that the Company does expect to continue to recognize; the adjustments of
these items should not be construed as an inference that these gains or
expenses are unusual, infrequent or non-recurring.Therefore, Company
management believes that both GAAP measures of its financial performance and
the respective non-GAAP measures should be considered together.

Operating Income

Operating income is a non-GAAP financial measure that adjusts net income for
the following non-operating items:

  *Gains on sales of available-for-sale securities
  *Losses on foreclosed assets held for sale
  *Charge for loss on deposit accounts
  *Provision for loan loss expense
  *Provision for income taxes

A reconciliation of the Company's net income to its operating income for the
quarters ended March 31, 2013 and 2012 is set forth below.

                                       Quarter ended
                                       31-Mar-13        31-Mar-12
                                       (Dollar amounts are in thousands)
Net income                              $953           $834
Add back:                                               
Provision for income taxes              232             81
Income before income taxes              1,185           915
Add back/(subtract):                                    
Gains on investment securities          (89)            (38)
Loss on foreclosed assets held for sale 72              101
Loss on deposit accounts                231             --
Provision for loan losses               400             900
                                       614             963
Operating income                        $1,799         $1,878

About Guaranty Federal Bancshares, Inc.

Guaranty Federal Bancshares, Inc. (Nasdaq:GFED) has a subsidiary corporation
offering full banking services.The principal subsidiary, Guaranty Bank, is
headquartered in Springfield, Missouri, and has nine full-service branches in
Greene and Christian Counties and Loan Production Offices in Taney, Wright,
Webster and Howell Counties.In addition, Guaranty Bank is a member of the
TransFund ATM network which provides its customers surcharge free access to
over 100 area ATMs and over 1,600 ATMs nationwide.For more information visit
the Guaranty Bank website:

The discussion set forth above 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 this
release.When used in this release, words such as "anticipates," "estimates,"
"believes," "expects," and similar expressions are intended to identify
forward-looking statements but are not the exclusive means of identifying such
statements.Such statements are subject to risks and uncertainties.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 not 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; changes in the general level of interest rates; the effect of
regulatory or government legislative changes; technology changes; fluctuation
in inflation; and other factors set forth in reports and other documents filed
by the Company with the Securities and Exchange Commission from time to time.

Financial Highlights:                                                   
                                            Quarter ended
Operating Data:                              31-Mar-13      31-Mar-12     
                                            (Dollar amounts are in thousands,
                                            except per share data)
Total interest income                        $6,419       $6,866      
Total interest expense                       1,428         1,850        
Net interest income                          4,991         5,016        
Provision for loan losses                    400           900          
Net interest income after provision for loan 4,591         4,116        
Noninterest income                           1,020         847          
Noninterest expense                          4,426         4,048        
Income before income taxes                   1,185         915          
Provision for income taxes                   232           81           
Net income                                   953           834          
Preferred stock dividends and discount       199           281          
Net income available for common shareholders $754         $553        
Net income per common share-basic            $0.28        $0.20       
Net income per common share-diluted          $0.25        $0.20       
Annualized return on average assets          0.59%          0.52%         
Annualized return on average equity          7.47%          6.08%         
Net interest margin                          3.33%          3.38%         
Efficiency ratio                             73.63%         69.04%        
Financial Condition Data:                    At             At            
                                             31-Mar-13      31-Dec-12
Cash and cash equivalents                    $42,695      $41,663     
Investments                                  107,572       102,162      
Loans, net of allowance for loan losses      453,207       468,376      
3/31/2013 - $8,112; 12/31/2012 - $8,740
Other assets                                 46,498        48,231       
Total assets                                 $649,972     $660,432    
Deposits                                     $503,644     $500,015    
FHLB advances                                52,950        68,050       
Subordinated debentures                      15,465        15,465       
Securities sold under agreements to          25,000        25,000       
Other liabilities                            1,472         1,034        
Total liabilities                            598,531       609,564      
Stockholders' equity                         51,441        50,868       
Total liabilities and stockholders' equity   $649,972     $660,432    
Equity to assets ratio                       7.91%          7.70%         
Book value per common share                  $14.49       $14.34      
Non performing assets                        $19,575      $19,861     

CONTACT: Shaun A. Burke, President & CEO
         Guaranty Bank
         1341 W. Battlefield
         Springfield, MO 65807
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