Guaranty Federal Bancshares, Inc. Announces Revised 2008 Financial Results

SPRINGFIELD, Mo., March 17, 2009 (GLOBE NEWSWIRE) -- Guaranty Federal Bancshares, Inc., (NasdaqGM:GFED - News), the holding company (the ``Company'') for Guaranty Bank (the ``Bank''), today announces revised financial results for its year ended December 31, 2008. Subsequent to the Company's earnings release on January 23, 2009, as a result of continuing analysis of a specific credit and as a result of a regular examination by the Missouri Division of Finance, the Bank determined it prudent to record an additional loan loss provision of $3 million for the 4th quarter of 2008. This provision is in addition to the $3.6 million originally expensed for the quarter. Revised net loss for the quarter and year ended were ($1.45) per diluted share ($3,780,000) and ($2.06) per diluted share ($5,360,000), respectively, down from the ($.72) per diluted share ($1,890,000) and ($1.33) per diluted share ($3,470,000), respectively, that was previously reported for those periods. The revised earnings are down from the $.49 per diluted share, $1,318,000, the Company earned during the same quarter of the prior year and the $2.19 per diluted share, $6,100,000, the Company earned during the year ended December 31, 2007.

Like other banks, Guaranty Bank is increasingly concerned about the difficult market conditions created by the softening economy. Non-performing loans have not increased from the original fourth quarter earnings release and the additional reserve is related to one problem loan previously identified by management. This action brings the Bank's allowance for loan losses to 2.90% of loans, net of unearned income, versus 2.40%, as reflected in the original fourth quarter earnings release. Management believes the revised allowance for loan losses is at a level to be sufficient in providing for potential loan losses in the Bank's existing loan portfolio.

The Bank's capital ratios remain above the levels required to be considered a well-capitalized financial institution following the additional provision. As of December 31, 2008, the Bank's Tier 1 leverage ratio was 7.41%, its Tier 1 risk-based capital ratio was 8.77%, and the Bank's total risk-based capital ratio was 10.04% -- all exceeding the minimums of 5%, 6% and 10%, respectively.

About Guaranty Federal Bancshares, Inc.

Guaranty Federal Bancshares, Inc. (NasdaqGM:GFED - News) 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 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 700 ATMs nationwide. For more information visit the Guaranty Bank website: http://www.gbankmo.com.

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          Year ended
 Operating Data:           31-Dec-08  31-Dec-07  31-Dec-08  31-Dec-07
                           ---------  ---------  ---------  ---------
                            (Dollar amounts are in thousands, except
                                         per share data)

 Total interest income     $   8,939  $   9,507  $  36,363  $  37,818
 Total interest expense        4,764      5,342     19,524     20,519
 Provision for loan losses     6,565        210     14,744        840
                           ---------  ---------  ---------  ---------
   Net interest income
    (loss) after provision
    for loan losses           (2,390)     3,955      2,095     16,459
 Noninterest income (loss)      (235)     1,066      2,316      4,883
 Noninterest expense           3,278      2,985     12,760     11,842
                           ---------  ---------  ---------  ---------

 Income (loss) before
  income tax                  (5,903)     2,036     (8,349)     9,500
 Income tax expense
  (credit)                    (2,123)       718     (2,989)     3,400
                           ---------  ---------  ---------  ---------

 Net income (loss)         $  (3,780) $   1,318  $  (5,360) $   6,100
                           =========  =========  =========  =========
 Net income (loss) per
  share-basic              $   (1.45) $    0.50  $   (2.06) $    2.25
                           =========  =========  =========  =========
 Net income (loss)
  per share-diluted        $   (1.45) $    0.49  $   (2.06) $    2.19
                           =========  =========  =========  =========

 Annualized return on
  average assets               (2.24%)     0.98%      (.83%)     1.18%
 Annualized return on
  average equity              (36.11%)    11.89%    (13.02%)    13.46%
 Net interest margin            2.73%      3.21%      2.71%      3.47%


                                                   As of      As of
 Financial Condition Data:                       31-Dec-08  31-Dec-07
                                                 ---------  ---------

 Cash and cash equivalents                       $  15,097  $  12,046
 Investments                                        72,843     19,400
 Loans, net of allowance for loan losses
   12/31/2008 - $16,728; 12/31/2007 - $5,963       558,327    516,242
 Other assets                                       29,403     18,090
                                                 ---------  ---------
      Total assets                               $ 675,670  $ 565,778
                                                 =========  =========

 Deposits                                        $ 447,079  $ 418,191
 FHLB advances                                     132,436     76,086
 Subordinated debentures                            15,465     15,465
 Securities sold under agreements to repurchase     39,750      9,849
 Other liabilities                                   3,627      3,500
                                                 ---------  ---------
      Total liabilities                            638,357    523,091
 Stockholder's equity                               37,313     42,687
                                                 ---------  ---------
      Total liabilities and stockholder equity   $ 675,670  $ 565,778
                                                 =========  =========

 Equity to assets ratio                               5.52%      7.54%
                                                 =========  =========
 Book value per share                            $   14.28  $   16.37
                                                 =========  =========
 Non performing assets                           $  26,347  $   7,981
                                                 =========  =========

          Guaranty Bank
          Shaun A. Burke, President & CEO
          417-520-4333
          www.gbankmo.com
          1341 W. Battlefield
          Springfield, MO 65807