8-K Trust Preferred
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
Current
Report Pursuant
to
Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of Report (Date of earliest event reported): December 15,
2005
Guaranty
Federal Bancshares, Inc.
(Exact
name of registrant as specified in its charter)
Delaware
(State
or
other jurisdiction of incorporation)
43-1792717
(I.R.S.
employer identification number)
0-23325
(Commission
file number)
1341
West Battlefield
Springfield,
Missouri 65807
(Address
of principal executive offices and zip code)
Registrant's
telephone number, including area code: (417) 520-4333
Not
applicable
(Former
name or former address, if changed since last report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2.):
[_]
Written communication pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[_] Soliciting
materials pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[_] Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
[_] Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
INCLUDED
INFORMATION
Item 1.01
Entry Into a Material Definitive Agreement.
The
information provided in Item 2.03 below is hereby incorporated by reference
herein.
Item 2.03
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance
Sheet Arrangement of a Registrant.
On
December 15, 2005, Guaranty Federal Bancshares, Inc. (the “Company”) completed
an offering of $15 million of Trust Preferred Securities (defined hereinafter).
The Company formed two wholly-owned subsidiaries Guaranty Statutory Trust I
(“Trust I”) and Guaranty Statutory Trust II (“Trust II, and together with Trust
I, the “Trusts”), each a Delaware statutory trust, for the purpose of issuing
the $15 million of Trust Preferred Securities. The proceeds of the sale of
Trust
Preferred Securities,
together with the proceeds of the Trusts’ sale of their common securities to the
Company, were used by each Trust to purchase the following debentures from
the
Company. The Company issued 30-year junior subordinated deferrable interest
debentures to Trust I in the aggregate principal amount of $5,155,000 (the
“Trust I Debentures”) and 30-year junior subordinated deferrable interest
debentures to Trust II in the aggregate principal amount of $10,310,000 (the
“Trust II Debentures,” and together with the Trust I Debentures, the
“Debentures”) pursuant to the terms of the Indentures dated December 15, 2005 by
and between the Company and Wilmington Trust Company, as trustee. The Trust
I
Debentures bear interest at a fixed rate of 6.92%, payable quarterly. The Trust
II Debentures bear interest at a fixed rate of 6.47% for 5 years, payable
quarterly, after issuance and thereafter at a floating rate equal to the three
month LIBOR plus 1.45%. Trust I issued trust preferred securities in aggregate
liquidation amount of $5,000,000 (approximately 97% of the Trust I Debentures)
(the “Trust I Preferred Securities”). Trust II issued trust preferred securities
in aggregate liquidation amount of $10,000,000 (approximately 97% of the Trust
II Debentures) (the “Trust II Preferred Securities,” and together with the Trust
I Preferred Securities, the “Trust Preferred Securities”). The Trust I Preferred
Securities and the Trust II Preferred Securities carry a cumulative preferred
dividend at a rate equal to the interest rate on the Trust I Debentures and
the
Trust II Debentures, respectively, and otherwise have the same or similar terms
as the Trust I Debentures and Trust II Debentures, respectively, including
provisions regarding default and redemption. The interest payments by the
Company to the Trusts will be used to pay the dividends payable by the Trusts
to
the holders of the Trust Preferred Securities.
Pursuant
to two guarantee agreements each dated December 15, 2005 by and between the
Company and Wilmington Trust Company, the Company issued a limited, irrevocable
guarantee of the obligations of each Trust under the Trust Preferred Securities
whereby the Company agreed to assume any and all payment obligations of the
Trusts related to the Trust Preferred Securities including distributions on,
and
the liquidation or redemption price of, the Trust Preferred Securities to the
extent each Trust does not have funds available.
The
Debentures mature on February 23, 2036. The Trust Preferred Securities have
no
stated maturity date, but, as a practical matter, will receive a final payment
of their outstanding liquidation amount plus accrued but unpaid interest, upon
payment to the Trusts by the Company of the Debentures at their maturity.
Subject to prior approval by the Federal Reserve Board, the Debentures and
the
Trust Preferred Securities are each callable by the Company or the Trusts,
respectively and as applicable, at its option after five years from issuance,
and sooner in the case of a special redemption at a special redemption price
ranging up to 103.2% of the principal amount thereof, and upon the occurrence
of
certain events, such as a change in the regulatory capital treatment of the
Trust Preferred Securities, either Trust being deemed an investment company
or
the occurrence of certain adverse tax events. In addition, the Company and
the
Trusts may defer interest and dividend payments, respectively, for up to five
consecutive years without resulting in a default. An event of default may occur
if the Company declares bankruptcy, fails to make the required payments within
30 days or breaches certain covenants within the Debentures.
The
Debentures are subordinated to the prior payment of any other indebtedness
of
the Company. The Company intends
to reflect the Trust Preferred Securities as financing debt on its consolidated
balance sheet. The Company intends to use the proceeds of the sale of the Trust
Preferred Securities for general corporate purposes which may include investment
in its banking subsidiary (including funding of loan growth in such subsidiary),
acquisitions, investments, payment of dividends and repurchases of its
outstanding common stock.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
Guaranty
Federal Bancshares, Inc.
By:
/s/
Shaun A. Burke______________
Shaun
A.
Burke
President
and Chief Executive Officer
Date:
January 9, 2006