<PAGE>


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   ----------

                                    FORM 10-K
                        FOR ANNUAL AND TRANSITION REPORTS
                     PURSUANT TO SECTIONS 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

         ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the fiscal year ended        June 30, 2001
                          ---------------------------
                                     - or -

|_|      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the transition period from                      to
                               --------------------    -------------------------

                         Commission File Number: 0-23325
                                                ---------

                        GUARANTY FEDERAL BANCSHARES, INC.
    ------------------------------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)

          Delaware                                     43-1792717
------------------------------------        ----------------------------------
(State or Other Jurisdiction of             (I.R.S. Employer Identification No.)
  Incorporation or Organization)

1341 West Battlefield, Springfield, Missouri                 65807
--------------------------------------------      ------------------------------
(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
                     --------------------------------------
                                (Title of Class)

         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 ]

         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
September 12, 2001, was $39.1 million.

         As of September 12, 2001 there were outstanding 4,076,991 shares of the
Registrant's Common Stock.

<PAGE>


                       DOCUMENTS INCORPORATED BY REFERENCE

1.  Portions of the Annual Report to Stockholders for the fiscal year ended
    June 30, 2001. (Part II)
2.  Portions of the Proxy Statement for the 2001 Annual Meeting of Stockholders.
    (Part III)

                        GUARANTY FEDERAL BANCSHARES, INC.

                                    Form 10-K

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
<S>                                     <C>                                                             <C>
Item                                                                                                   Page

                                                       PART I

         1.       Business                                                                               1

         2.       Properties                                                                            19

         3.       Legal Proceedings                                                                     19

         4.       Submission of Matters to a Vote of Security Holders                                   19

                                                       PART II

         5.       Market for Registrant's Common Equity and Related Stockholder Matters                 19

         6.       Selected Financial Data                                                               19

         7.       Management's Discussion and Analysis of
                  Financial Condition and Results of Operations                                         19

         7A.      Quantitative and Qualitative Disclosures About Market Risk                            20

         8.       Financial Statements and Supplementary Data                                           20

         8.       Changes in and Disagreements with Accountants
                  on Accounting and Financial Disclosure                                                20

                                                      PART III

         10.      Directors and Executive Officers of the Registrant                                    20

         11.      Executive Compensation                                                                20

         12.      Security Ownership of Certain Beneficial Owners and Management                        20

         13.      Certain Relationships and Related Transactions                                        20

         14.      Exhibits, Financial Statement Schedules and Reports on Form 8-K                       21
</TABLE>

Signatures

<PAGE>

         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.

         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
FLUCTUATIONS; 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.

<PAGE>


PART I

Item 1.  Business

Business 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 the 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 (the "Conversion") 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.

         The Company is a unitary savings and loan holding company which, under
existing laws, generally is not restricted in the types of business activities
in which it may engage provided the Bank retains a specified amount of its
assets in housing-related investments. 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
provided on a consolidated basis.

Business of the Bank

         The Bank is a federally chartered stock savings bank that obtained its
current name in April 1995 at the time it reorganized from a mutual savings
association known as "Guaranty Federal Savings and Loan Association" into a
mutual holding company structure.

         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 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. 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 Office of Thrift Supervision ("OTS") and
its deposits are insured by the Savings Association Insurance Fund ("SAIF") of
the Federal Deposit Insurance Corporation (the "FDIC").

Market Area

         The Bank's primary market area is Greene County, which is in the
southwestern corner of 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.


                                       1

<PAGE>

Lending Activities

         Set forth below is selected data relating to the composition of the
Bank's loan portfolio at the dates indicated:

Composition of Loan Portfolio
<TABLE>
<CAPTION>

                                                                   As of June 30,
                                 --------------------------------------------------------------------------------------------
                                        2001                 2000               1999              1998             1997
                                 -----------------    -----------------    --------------   ---------------   ---------------
                                      $        %           $        %         $        %       $        %      $         %
                                 ---------   -----    ----------   ----    -------   ----   -------    ----   -------   -----
                                                               (Dollars in Thousands)

Mortgage loans (includes loans held for sale):
<S>                                  <C>        <C>        <C>      <C>       <C>    <C>        <C>     <C>      <C>    <C>

   One to four units             $ 189,436     55%     $ 198,155    63%    178,680    63%   148,396     66%   116,441    68%
   Multi-family                     42,641     12%        39,146    12%     35,795    13%    21,536     10%    15,457     9%
   Construction                     55,317     16%        41,372    13%     38,605    14%    34,729     16%    25,149    15%
   Commercial real estate           43,893     13%        26,559     9%     20,771     7%    12,721      6%     8,323     5%
                                   -------    ----     ---------   ----    -------   ----   -------    ----   -------   ----
Total mortgage loans               331,287     96%       305,232    97%    273,851    97%   217,382     98%   165,370    97%
                                   -------    ----     ---------   ----    -------   ----   -------    ----   -------   ----
   Commercial business loans         5,511      1%           761     0%        544     0%       646      0%       383     0%
   Share loans                         273      0%           461     0%        573     0%       623      0%       720     0%
   Automobile                        2,260      1%         1,941     1%      2,016     1%     2,018      1%     1,765     1%
   Other                             8,040      2%         7,118     2%      5,389     2%     3,251      1%     2,727     2%
                                   -------    ----     ---------   ----    -------   ----   -------    ----   -------   ----
Total consumer and other loans      16,084      4%        10,281     3%      8,522     3%     6,538      2%     5,595     3%
                                   -------    ----     ---------   ----    -------   ----   -------    ----   -------   ----
Total loans                        347,371    100%       315,513   100%    282,373   100%   223,920    100%   170,965   100%
                                              ====                 ====              ====              ====             ====
Less:
   Loans in process                 24,212                16,668            15,466           15,235            10,476
   Deferred loan fees/costs, net       268                   164               180               84               (39)
   Unearned discounts                   88                   108               109              190               216
   Allowance for loan losses         2,697                 2,520             2,349            2,191             2,177
                                   -------             ---------           -------          -------           -------
Total Loans, Net                 $ 320,106             $ 296,053           264,269          206,220           158,135
                                   =======             =========           =======          =======           =======
</TABLE>


The following table sets forth the dollar amount, before deductions for unearned
discounts, deferred loan costs and allowance for loan losses, as of June 30,
2001 of all loans due after June 2002, which have pre-determined interest rates
and which have adjustable interest rates.

Fixed and Adjustable Rate Loans by Type

                                                  Adjustable
                            Fixed Rates             Rates                 Total
                            -----------            -------               -------
                                          (Dollars in Thousands)
One-to four-family         $     51,600            128,162               179,762
Multi-family                     12,845             28,361                41,206
Construction                      1,605                 76                 1,681
Commercial real estate           10,155             18,791                28,946
Consumer & other loans            2,386              7,325                 9,711
                            -----------            -------               -------
Total loans (1)            $     78,591            182,715               261,306
                           ============            =======               =======


(1) Before deductions for unearned discounts, deferred loan fees/costs, net and
    allowances for loan losses.


                                       2

<PAGE>

         The following table sets forth the maturity of the Bank's loan
portfolio as of June 30, 2001. 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. Prepayments and
scheduled principal repayments on loans totaled $24.7 million for the year ended
June 30, 2001.
<TABLE>
<CAPTION>

                                                 Due After
                               Due in One        One Through          Due After
Loan Maturities                Year or Less      Five Years           Five Years        Total
---------------                ------------      -----------          ----------   -----------
                                                     (Dollars in thousands)
<S>                              <C>              <C>                 <C>          <C>
One to four family              $    9,650            28,297             151,465       189,412
Multi family                         1,435            18,908              22,298        42,641
Construction                        30,082             1,681                   -        31,763
Commercial real estate              14,313             6,946              22,000        43,259
Consumer and other loans             6,373             2,600               7,111        16,084
                                ----------       -----------          ----------   -----------

   Total loans (1)              $   61,853            58,432             202,874       323,159
                                ----------       -----------          ----------   -----------
Less:
Deferred loan fees/costs                                                                   268
Unearned discounts                                                                          88
Allowance for loan losses                                                                2,697
                                                                                   -----------
Loans receivable net                                                               $   320,106
                                                                                   ===========

(1) Includes mortgage loans held for sale of $2,863.
</TABLE>


         One- to Four-Family Mortgage Loans. The Bank offers fixed- and
adjustable-rate first mortgage loans secured by one- to four-family residences
in the Bank's primary lending area. Typically, such residences are single family
homes that serve as the primary residence of the owner. However, there are a
significant number of loans originated by the Bank which are secured by
non-owner occupied properties. Loan originations are generally obtained from
existing or past customers, members of the local community, referrals from
attorneys, established builders, and realtors within the Bank's market area.
Originated mortgage loans in the Bank's portfolio include due-on-sale clauses
which provide the Bank with the contractual right to deem the loan immediately
due and payable in the event that the borrower transfers ownership of the
property without the Bank's consent.

         As of June 30, 2001, $189.4 million or 55% of the Bank's total loan
portfolio consisted of one- to four-family residential loans, of which 69% were
ARM loans. The Bank currently offers ARM loans that have fixed interest rates
for either one, three or five years and, following that initial fixed period,
adjust annually. The Bank has also offered ARM loans for which interest rates
adjust every one, three or five years. Generally, ARM loans provide for limits
on the maximum interest rate adjustment ("caps") that can be made at the end of
each applicable period and throughout the duration of the loan. ARM loans are
originated for a term of up to 30 years on owner-occupied properties and
generally up to 25 years on non-owner occupied properties. Typically, interest
rate adjustments are calculated based on U.S. treasury securities adjusted to a
constant maturity of one year (CMT), plus a 2.50% to 2.75% margin. Interest
rates charged on fixed-rate loans are competitively priced based on market
conditions and the cost of funds existing at the time the loan is committed. The
Bank's fixed-rate mortgage loans currently are made for terms of 15 and 30
years.

         Generally, ARM loans pose credit risks different from the risks
inherent in fixed-rate loans, primarily because as interest rates rise the
underlying payments of the borrower rise, thereby increasing the potential for
default. At the same time, the marketability of the underlying property may be
adversely affected by higher interest rates. The Bank does not originate ARM
loans that provide for negative amortization.


                                       3

<PAGE>

         The Bank generally originates both owner occupied and non-owner
occupied one- to four-family residential mortgage loans in amounts up to 80% of
the appraised value or the selling price of the mortgaged property, whichever is
lower. The Bank may on occasion make loans up to 95% of appraised value or the
selling price of the mortgage property, whichever is lower. However, the Bank
typically requires private mortgage insurance for the excess percentage over 80%
for mortgage loans with loan to value percentages over 80%.

         Multi-Family Mortgage Loans. The Bank originates multi-family mortgage
loans in its primary lending area. As of June 30, 2001, $42.6 million or 12% of
the Bank's total loan portfolio consisted of multi-family residential loans.
With regard to multi-family mortgage loans, the Bank generally requires personal
guarantees of the principals as well as security interest in real estate.
Multi-family mortgage loans are generally originated in amounts of up to 80% of
the appraised value of the property. The majority of the Bank's multi-family
mortgage loans have been originated with an adjustable rates of interest, the
majority, of which are quoted at a spread to the FHLB advance rate for the
initial fixed rate period and with subsequent adjustments at a spread to the one
year US Treasury rate. The loan-to-one-borrower limitation, $7.5 million as of
June 30, 2001, is the maximum the Bank will lend on a multi-family real estate
loan. Loans above $500,000 require Board of Directors approval on a case-by-case
basis.

         Loans secured by multi-family residential real estate generally involve
a greater degree of credit risk than one- to four-family residential mortgage
loans and carry larger loan balances. This increased credit risk is a result of
several factors, including the concentration of principal in a limited number of
loans and borrowers, the effects of general economic conditions on income
producing properties, and the increased difficulty of evaluating and monitoring
these types of loans. Furthermore, the repayment of loans secured by
multi-family residential real estate is typically dependent upon the successful
operation of the related real estate property. If the cash flow from the project
is reduced, the borrower's ability to repay the loan may be impaired.

         Construction Loans. As of June 30, 2001, construction loans totaled
$55.3 million or 16% of the Bank's total loan portfolio. Construction loans are
made to certain builders for construction of single family homes for resale, as
well as to individuals in connection with long-term, permanent loans to be made
upon completion of the construction. This portfolio predominantly consists of
speculative loans, i.e., loans to builders who are speculating that they will be
able to locate a purchaser for the underlying property prior to or shortly after
the time construction has been completed.

         The Bank principally finances the construction of single-family homes.
Construction loans are made to contractors who have sufficient financial
strength and a proven track record, for the purpose of resale, as well as on a
"pre-sold" basis. Construction loans made for the purpose of resale generally
provide for interest only payments at fixed rates and have terms of six months
to one year. Construction loans on "pre-sold" homes may convert into a permanent
ARM loan upon completion of construction. Construction loans to a borrower who
will occupy a home, or to a builder who has pre-sold the home, typically have
loan to value ratios of up to 85%. Construction loans for speculative purposes,
models, and commercial properties typically have loan to value ratios of up to
80%. Loan proceeds are disbursed in increments as construction progresses and as
inspections warrant. The Bank employs inspectors rather than paying title
companies for construction disbursement purposes.

         Construction lending by its nature entails significant additional risks
as compared with one-to four-family mortgage lending, attributable primarily to
the fact that funds are advanced upon the security of the project under
construction prior to its completion. As a result, construction lending often
involves the disbursement of substantial funds with repayment dependent on the
success of the ultimate project and the ability of the borrower or guarantor to
repay the loan. Because of these factors, the analysis of the prospective
construction loan projects require an expertise that is different in significant
respects from that which is required for residential mortgage lending. The Bank
has attempted to address these risks through its underwriting and construction
monitoring procedures.

                                       4

<PAGE>

         Commercial Real Estate. As of June 30, 2001, the Bank has commercial
real estate loans totaling $43.9 million or 13% of the Bank's total loan
portfolio. Commercial real estate loans are generally originated in amounts up
to 80% of the appraised value of the mortgaged property. The majority of the
Bank's commercial real estate loans have been originated with adjustable rates
of interest, the majority, of which are quoted at a spread to the FHLB advance
rate for the initial fixed rate period with subsequent adjustments at a spread
to the one year US Treasury rate. The Bank's commercial real estate loans are
generally permanent loans secured by improved property such as office buildings,
retail stores, small shopping centers, medical offices, motels, churches and
other non-residential buildings.

         To originate commercial real estate loans, the Bank generally requires
a security interest in the real estate, personal guarantees of the principals, a
security interest in personal property, and a standby assignment of rents and
leases. The Bank has established its loan-to-one borrower limitation, which was
$7.5 million as of June 30, 2001, as its maximum commercial real estate loan
amount. Commercial loans above $500,000 require Board of Directors approval on a
case-by-case basis. Because of the small number of commercial real estate loans
and the relationship of each borrower to the Bank, each such loan has differing
terms and conditions applicable to the particular borrower.

         Loans secured by commercial real estate are generally larger and
involve a greater degree of risk than residential mortgage loans. Because
payments on loans secured by commercial real estate are often dependent on
successful operation or management of the properties, repayment of such loans
may be subject, to a greater extent, to adverse conditions in the real estate
market or the economy. The Bank seeks to minimize these risks by careful
underwriting, requiring personal guaranty, lending only to established customers
and borrowers otherwise known to the Bank, and generally restricting such loans
to its primary market area.

         As of June 30, 2001, the Bank's loan portfolio also included
approximately $10.3 million in loans to develop land into residential lots and
loans on completed lots in the commercial real estate loan portfolio. The Bank
utilizes its knowledge of the local market conditions and appraisals to evaluate
the development cost and estimate projected lot prices and absorption rates to
assess loans on residential subdivisions. The Bank typically loans up to 80% of
the appraised value over terms up to two years. Development loans generally
involve a greater degree of risk than residential mortgage loans because (1) the
funds are advanced upon the security of the land which has a materially lower
value prior to completion of the infrastructure required of a subdivision, (2)
the cash flow available for debt repayment is a function of the sale of the
individual lots, and (3) the interest required to service the debt is a function
of the time required to complete the development and sell the lots.

         Consumer and Other Lending. The Bank also offers other loans, primarily
loans secured by certificates of deposit, commercial business assets, consumer
loans, home equity and automobile loans. As of June 30, 2001, the Bank has such
loans totaling $16.1 million or 4% of the Bank's total loan portfolio. The Bank
will continue to expand its consumer and commercial lending as opportunities
present themselves.

         Loan Approval Authority and Underwriting. All loans must have the
approval of the members of the Loan Committee which consists of seven senior
officers. The Loan Committee meets periodically to review and approve loans made
within the scope of its authority. Loans in excess of $500,000 require prior
approval by the Board of Directors.

         For all loans originated by the Bank, upon receipt of a completed loan
application from a prospective borrower, a credit report is requested, income,
assets, and certain other information are verified, and, if necessary,
additional financial information is requested. An appraisal of the real estate
intended to secure the proposed loan is generally required, which currently is
performed by certified appraisers. It is the Bank's policy to obtain appropriate
insurance protection on all real estate first mortgage loans. Borrowers
generally must also obtain hazard insurance prior to closing. Borrowers
generally are required to advance funds for certain items such as real estate
taxes, flood insurance and private mortgage insurance, when applicable.

Delinquencies and Problem Assets.


                                       5

<PAGE>

         Delinquent Loans. As of June 30, 2001, the Bank has twenty two loans 90
days or more past due with a principal balance of $2,304,205 and twenty nine
loans between 30 and 89 days past due with total principal balances of
$2,199,020. The Bank generally does not accrue interest on loans past due more
than 90 days.

The following table sets forth the Bank's loans that were 90 days or more
delinquent at the dates indicated.
<TABLE>
<CAPTION>

   Delinquency Summary                                                                        As of June 30,
   -------------------                                                  --------------------------------------------------------
                                                                           2001         2000        1999        1998       1997
                                                                        --------       ------      ------      ------     ------
                                                                                             (Dollars in Thousands)
<S>                                                                        <C>          <C>           <C>           <C>       <C>
   Loans contractually past maturity or past due 90 days or more and
     accounted for on a non-accrual basis:
   Mortgage Loans:
     One- to four-family                                                $   444           13          110          -         279
     Multi-family                                                            -             -            -          -         286
     Construction                                                         1,065           84            -          -         190
     Commercial real estate                                                 668            -            -          -           -
                                                                        --------       ------      ------     ------      ------
                                                                          2,177           97          110          -         755
                                                                        --------       ------      ------     ------      ------
   Non-mortgage loans:
     Commercial loans                                                       109            -            -          -           -
     Consumer and other loans                                                18            -            -          -           -
                                                                        --------       ------      ------     ------      ------
                                                                            127            -            -          -           -
                                                                        --------       ------      ------     ------      ------
        Total non-accrual loans                                           2,304           97          110          -         755
                                                                        --------       ------      ------     ------      ------
   Accruing loans which are contractually past maturity
    or past due 90 days or more:

   Mortgage Loans:
     One- to four-family                                                     -           152            -          -           -
     Multi-family                                                            -             -            -          -           -
     Construction                                                            -             -          102        121         113
     Commercial real estate                                                  -             -            -          -           -
                                                                        --------       ------      ------     ------      ------
                                                                             -           152          102        121         113
                                                                        --------       ------      ------     ------      ------
   Non-mortgage loans:
     Commercial loans                                                        -             -            -          -           -
     Consumer and other loans                                                -             -            -          -           -
                                                                        --------       ------      ------     ------      ------
                                                                             -             -            -          -           -
                                                                        --------       ------      ------     ------      ------
        Total past maturity or past due accruing loans                       -           152          102        121         113
                                                                        --------       ------      ------     ------      ------
   Total contractually past maturity or 90 days or
   more past due                                                        $ 2,304          249          212        121         868
                                                                        ========       ======      ======     ======      ======
   Total contractually past maturity or 90 days or
   more past due as a percentage of net loans                             0.73%        0.08%        0.08%      0.06%       0.55%
                                                                          ====         ====         ====       ====        ====
   Total contractually past maturity or 90 days or
   more past due as a percentage of total assets                          0.62%        0.07%        0.07%      0.05%       0.44%
                                                                          ====         ====         ====       ====        ====

</TABLE>


                                       6

<PAGE>

         Non-Performing Assets. Loans are reviewed on a regular basis and are
placed on non-accrual status when, in the opinion of management, the collection
of all interest at contractual rates is doubtful. Mortgage loans are placed on
non-accrual status generally when either principal or interest is more than 90
days past due. Interest accrued and unpaid at the time a loan is placed on
non-accrual status is charged against interest income.

         Real estate acquired by the Bank as a result of foreclosure or by deed
in lieu of foreclosure is deemed a foreclosed asset held for sale until such
time as it is sold. When a foreclosed asset held for sale is acquired it is
recorded at its estimated fair value, less estimated selling expenses.
Valuations are periodically performed by management, and any subsequent decline
in fair value is charged to operations.

         The following table shows the principal amount of non-performing assets
and the resulting impact on interest income for the periods then ended.

<TABLE>
<CAPTION>

   Non-Performing Assets                                                            As of June 30,
   ---------------------                                ---------------------------------------------------------------
                                                           2001         2000          1999        1998            1997
                                                        --------       ------        ------      ------          ------
                                                                               (Dollars in Thousands)
<S>                                                       <C>            <C>           <C>        <C>              <C>
   Mortgage Loans:
     One- to four-family                                $  1,358          578           151         213             279
     Multi-family                                              -          441           751         775             286
     Construction                                          2,115           84             -           -             190
     Commercial real estate                                1,396        3,652             -           -             502
                                                        --------       ------        ------      ------          ------
                                                           4,869        4,755           902         988           1,257
                                                        --------       ------        ------      ------          ------
   Non-mortgage loans:
     Commercial loans                                         60            -             -           -               -
     Consumer and other loans                                 19            2             4          24               -
                                                        --------       ------        ------      ------          ------
                                                              79            2             4          24               -
                                                        --------       ------        ------      ------          ------
        Total non-accrual loans                            4,948        4,757           906       1,012           1,257
   Real estate and other assets acquired in
   settlement of loans                                         4            2           102         286             210
                                                        --------       ------        ------      ------          ------
   Total non-performing assets                          $  4,952        4,759         1,008       1,298           1,467
                                                        ========       ======        ======      ======          ======

   Total non-accrual loans as a percentage of
   net loans                                               1.55%        1.61%         0.34%       0.49%           0.79%
                                                           ====         ====          ====        ====            ====
   Total non-performing assets as a
   percentage of total assets                              1.32%        1.39%         0.32%       0.50%           0.74%
                                                           ====         ====          ====        ====            ====
   Impact on interest income for the period
   Interest income that would have been
   recorded on non-accruing loans                       $    179           47            10          16              31
                                                        ========       ======        ======      ======          ======
</TABLE>


                                       7

<PAGE>
         Problem Assets. Federal regulations require that the Bank review and
classify its assets on a regular basis. In addition, in connection with
examinations of insured institutions, OTS examiners have authority to identify
problem assets and, if appropriate, require them to be classified. There are
three classifications for problem assets: substandard, doubtful, and loss.
"Substandard assets" must have one or more defined weaknesses and are
characterized by the distinct possibility that the insured institution will
sustain some loss if the deficiencies are not corrected. "Doubtful assets" have
the weaknesses of substandard assets with the additional characteristic that the
weaknesses make collection or liquidation in full on the basis of currently
existing facts, conditions, and values questionable, and there is a high
possibility of loss. An asset classified "loss" is considered uncollectible and
of such little value that continuance as an asset of the institution is not
warranted. The regulations have also created a special mention category,
described as assets which do not currently expose an insured institution to a
sufficient degree of risk to warrant classification but do possess credit
deficiencies or potential weaknesses deserving management's close attention.
Assets classified as substandard or doubtful require the institution to
establish general allowances for loan losses. If an asset or portion thereof is
classified loss, the insured institution must either establish specific
allowances for loan losses in the amount of 100% of the portion of the asset
classified loss or charge off such amount. A portion of general loss allowances
established to cover possible losses related to assets classified substandard or
doubtful may be included in determining an institution's regulatory capital,
while specific valuation allowances for loan losses generally do not qualify as
regulatory capital.

         For management purposes, the Bank also designates certain loans for
additional attention. Such loans are called "Special Mention" and have
identified weaknesses that if the situation deterioriates the loans would merit
a Substandard classification.

         The following table shows the aggregate amounts of the Bank's
classified assets as of June 30, 2001.

<TABLE>
<CAPTION>
   Classification of Assets       Special Mention        Substandard             Doubtful                Loss
                                  -----------------    -----------------     ------------------    ------------------
                                   Number   Amount      Number    Amount      Number     Amount     Number     Amount
                                  -------  --------    -------   -------     --------   -------    ------     -------
                                                                 (Dollars in Thousands)
<S>                             <C>       <C>          <C>       <C>         <C>       <C>        <C>         <C>
   Loans:
     One- to four-family              33    $ 2,251        23    $ 2,972       -        $  -         -        $  -
     Multi-family                    -          -         -          -         -           -         -           -
     Commercial real estate          -          -           4      1,397       -           -           1         175
     Land                            -          -           3        285       -           -         -           -
     Other loans                     -          -          20        325       -           -         -           -
                                  ------    -------    ------    -------     ------     ------     ------     ------
   Total loans                        33      2,251        50      4,979       -           -           1         175
                                  ------    -------    ------    -------     ------     ------     ------     ------
   Foreclosed assets held-for-sale:
     One- to four-family             -          -         -          -         -           -         -           -
     Commercial real estate          -          -         -          -         -           -         -           -
     Land and other assets             1          4       -          -         -           -         -           -
                                  ------    -------    ------    -------     ------     ------     ------     ------
   Total foreclosed assets             1          4       -          -         -           -         -           -
                                  ------    -------    ------    -------     ------     ------     ------     ------
     Total                            34    $ 2,255        50    $ 4,979       -        $  -           1       $ 175
                                  ======    =======    ======    =======     ======     ======     ======     ======
</TABLE>

         As of June 30, 2001, the Bank has no real estate obtained through
foreclosure, and $4,200 in other repossessed property.

         One borrower accounts for $3.5 million of the impaired loans of which
$1.7 million is over 90-days delinquent. The collateral securing the loans
includes single-family houses and two office condominium units. A second
troubled borrower is a builder having difficulty selling an upper-bracket home.
A third borrower has two loans secured by multi-family properties that have not
historically generated sufficient cash flow to properly maintain the properties
and service the debt. Other impaired loans are collateralized primarily by
single family residences.

Allowance for Loan Losses
                                       8

<PAGE>



         The allowance for loan losses is established through a provision for
loan losses based on management's evaluation of the risk inherent in its loan
portfolio and the general economy. Such evaluation, which includes a review of
all loans on which full collectibility may not be reasonably assured, considers
among other matters, the estimated fair value of the underlying collateral,
economic conditions, historical loan loss experience, and other factors that
warrant recognition in providing for an adequate loan loss allowance. In
addition, various regulatory agencies, as an integral part of their examination
process, periodically review the Bank's allowance for loan losses and valuation
of foreclosed assets held for sale. Such agencies may require the Bank to
recognize additions to the allowance based on their judgments about information
available to them at the time of their examination.

         As of June 30, 2001 the Bank's total allowance for loan losses was $2.7
million or 0.78% of total loans. This allowance reflects not only management's
determination to maintain an allowance for loan losses consistent with
regulatory expectations for non-performing assets, but also reflects the Bank's
policy of evaluating the risks inherent in its loan portfolio, and the regional
economy.

         During fiscal year 1997, the Bank experienced a net recovery and
elected to make no further addition to the allowance. For fiscal 1998 through
2001, the Bank experienced loan charge offs in excess or recoveries, and based
on the loan portfolio review discussed above, elected to add to the allowance
through a provision for loan loss, as shown in the table below. Management
anticipates the need to continue adding to the allowance through charges to
provision for loan losses as anticipated growth in the loan portfolio of other
circumstances warrant.

         Non-performing loans increased during the fourth quarter of fiscal 2000
which has caused a decrease in the Bank's allowance for loan losses as a
percentage of non-performing loans. However, the Bank has been able to improve
the overall quality of the collateral on its non-performing loan portfolio
through the reduction of construction type loans to more marketable real estate.
Thus, the Bank does not feel that the anticipated loss in its non-performing
loans has increased proportionally to the increase in the number and balance of
these loans.


                                       9

<PAGE>

         The following tables set forth certain information concerning the
Bank's allowance for possible loan losses for the periods indicated.
<TABLE>
<CAPTION>

   Allowance for Loan Losses                                                             Year Ended June 30,
                                                                ---------------------------------------------------------------
                                                                  2001           2000          1999          1998         1997
                                                                -------         -------       ------        ------       ------
                                                                                       (Dollars in Thousands)
<S>                                                             <C>             <C>             <C>        <C>          <C>
 Beginning balance                                              $ 2,520           2,349        2,191         2,177        2,108
                                                                -------         -------       ------        ------       ------
   Gross loan charge offs
   Mortgage Loans:

     One- to four-family                                             (5)            -            -             (56)         (59)
     Multi-family                                                   -               -            -             -            -
     Construction                                                   -               -             (3)          (49)         -
     Commercial real estate                                        (115)            -            -             -            -
                                                                -------         -------       ------        ------       ------
                                                                   (120)            -             (3)         (105)         (59)
                                                                -------         -------       ------        ------       ------
   Non-mortgage loans:
     Commercial loans                                               -               -            -             -            -
     Consumer and other loans                                       (13)             (9)         (26)          (46)          (4)
                                                                -------         -------       ------        ------       ------
                                                                    (13)             (9)         (26)          (46)          (4)
                                                                -------         -------       ------        ------       ------
        Total charge offs                                          (133)             (9)         (29)         (151)         (63)
                                                                -------         -------       ------        ------       ------
   Recoveries
   Mortgage Loans:

     One- to four-family                                            -               -            -              42           35
     Multi-family                                                   -               -            -             -              -
     Construction                                                   -               -            -             -              -
     Commercial real estate                                         -               -            -             -              -
                                                                -------         -------       ------        ------       ------
                                                                    -               -            -              42           35
                                                                -------         -------       ------        ------       ------
   Non-mortgage loans:
     Commercial loans                                               -               -              7           -             97
     Consumer and other loans                                       -               -            -             -              -
                                                                -------         -------       ------        ------       ------
                                                                    -               -              7           -             97
                                                                -------         -------       ------        ------       ------
        Total recoveries                                            -               -              7            42          132
                                                                -------         -------       ------        ------       ------
   Net loan recoveries (charge-offs)                               (133)             (9)         (22)         (109)          69
   Provision for loan losses charged
   (credited) to expense                                            310             180          180           123            -
                                                                -------         -------       ------        ------       ------
   Ending balance                                               $ 2,697           2,520        2,349         2,191        2,177
                                                                =======         =======       ======        ======       ======

   Net charge-offs (recoveries) as a
   percentage of average loans, net                               0.04%           0.00%        0.01%         0.06%       -0.05%
                                                                  ====            ====         ====          ====         ====
   Allowance for loan losses as a
   percentage of average loans, net                               0.87%           0.89%        1.00%         1.24%        1.49%
                                                                  ====            ====         ====          ====         ====
   Allowance for loan losses as a
   percentage of total non-performing loans                         55%             53%         259%          217%         173%
                                                                  ====            ====         ====          ====         ====


</TABLE>


                                       10

<PAGE>

Allocation of Allowance for Loan Losses

         The following table shows the amount of the allowance allocated to each
loan category and the percent of that loan category to total loans.

<TABLE>
<CAPTION>

                                                                       As of June 30,
                                   --------------------------------------------------------------------------------
                                        2001             2000             1999             1998             1997
                                   -------------    -------------    ------------     -----------     -------------
                                    Amount    %      Amount    %      Amount    %      Amount   %      Amount    %
                                   -------  ----    -------  ----    -------  ---     -------  ---    -------   ---
                                                                   (Dollars in thousands)
<S>                                <C>      <C>     <C>     <C>    <C>       <C>     <C>     <C>     <C>        <C>

Mortgage Loans                     $ 2,562   95%    $ 2,439   97%    $ 2,341    97%   $ 2,185   97%   $ 2,099    97%
Consumer and other loans               135    5%         81    3%          8     3%         6    3%        78     3%
                                   -------  ---     -------  ---     -------   ---    -------  ---    -------   ---
   Total                           $ 2,697  100%    $ 2,520  100%    $ 2,349   100%   $ 2,191  100%   $ 2,177   100%
                                   =======  ===     =======  ===     =======   ===    =======  ===    =======   ===
</TABLE>

Investment Activities

         The investment policy of the Company, which is established by the Board
of Directors and reviewed by the Investment Committee, is designed primarily to
provide and maintain liquidity, to generate a favorable return on investments
without incurring undue interest rate and credit risk, and to complement the
Bank's lending activities. The policy currently provides for held-to-maturity
and available-for-sale portfolios. The Company has adopted an investment policy
which strictly prohibits speculation in investment securities. The Company does
not currently engage in trading investment securities and does not anticipate
doing so in the future. As of June 30, 2001, the Company has investment
securities with a carrying value of $24.0 million and an estimated fair value of
$24.1 million. Of those securities $19.4 million, or 81%, of the Company's
investment securities portfolio are available-for-sale.

         The Company has the authority to invest in various types of liquid
assets, including United States Treasury obligations, securities of various
federal agencies, trust preferred securities, certain certificates of deposit of
insured banks and savings institutions, certain bankers' acceptances, repurchase
agreements, and loans on federal funds.

         The following tables set forth the amortized cost and approximate fair
market values of the available-for-sale securities and held-to-maturity
securities:
<TABLE>
<CAPTION>

                                                                               Gross             Gross
                                                            Amortized         Unrealized       Unrealized        Approximate
Investment Securities                                         Cost             Gains            (Losses)          Fair Value
---------------------                                       ---------         ----------       -----------       -----------
<S>                                                     <C>                 <C>               <C>                 <C>
As of June 30, 2001
AVAILABLE-FOR-SALE SECURITIES:
Equity Securities:
   FHLMC stock                                           $     91,063        6,237,587              -               6,328,650
   Other stock                                              2,653,339          142,061            (350)             2,795,050
Debt Securities:
   Trust preferred securities                               6,523,205              -          (104,405)             6,418,800
   U. S. government agencies                                1,993,423            2,896              -               1,996,319
   Mortgage-backed securities                               1,919,871              -           (10,798)             1,909,073
HELD-TO-MATURITY SECURITIES:
   U. S. government agencies                                  405,369            3,337              -                 408,706
   Mortgage-backed securities                               4,140,497          165,426         (13,371)             4,292,552
                                                         ------------        ---------        --------             ----------
                                                         $ 17,726,767        6,551,307        (128,924)            24,149,150
                                                         ============        =========        ========             ==========
</TABLE>

                                       11

<PAGE>

<TABLE>
<CAPTION>
                                                                            Gross           Gross
                                                        Amortized         Unrealized      Unrealized       Approximate
Investment Securities                                     Cost              Gains          (Losses)         Fair Value
                                                     ------------       ------------     -----------      ------------
<S>                                                     <C>             <C>             <C>                <C>
As of June 30, 2000
AVAILABLE-FOR-SALE SECURITIES:
Equity Securities:
   FHLMC stock                                       $     94,000          3,794,000               -         3,888,000
   Other stock                                            938,005             83,665        (172,379)          849,291
Debt Securities:
   Trust preferred securities                           6,509,629            143,604               -         6,653,233
   Mortgage-backed securities                           2,295,819                -           (41,036)        2,254,783
HELD-TO-MATURITY SECURITIES:
   U. S. government agencies                              600,061                -           (19,022)          581,039
   Mortgage-backed securities                           6,168,611            113,477        (106,541)        6,175,547
                                                     ------------       ------------     -----------      ------------
                                                     $ 16,606,125          4,134,746        (338,978)       20,401,893
                                                     ============       ============     ===========      ============

                                                                            Gross            Gross
                                                       Amortized          Unrealized      Unrealized       Approximate
Investment Securities                                      Cost             Gains          (Losses)         Fair Value
                                                     ------------       ------------     -----------      ------------
As of June 30, 1999
AVAILABLE-FOR-SALE SECURITIES:
Equity Securities:
   FHLMC stock                                       $     94,000          5,474,000               -         5,568,000
   Other stock                                            735,762            106,973         (72,700)          770,035
Debt Securities:
   Mortgage-backed securities                           2,644,526              7,168         (38,554)        2,613,140
HELD-TO-MATURITY SECURITIES:
   U. S. government agencies                            7,442,210                 32          (6,800)        7,435,442
   Mortgage-backed securities                           7,952,433            300,020         (63,913)        8,188,540
                                                     ------------       ------------     -----------      ------------
                                                     $ 18,868,931          5,888,193        (181,967)       24,575,157
                                                     ============       ============     ===========      ============
</TABLE>


                                       12

<PAGE>



Composition of Investment Portfolio

         The following table sets forth certain information regarding the
carrying values, weighted average yields and maturities of the Bank's investment
securities portfolio as of June 30, 2001:
<TABLE>
<CAPTION>

                                                                                    Weighted
Investment Portfolio Maturities and                                  Amortized       Average          Approximate
Average Weighted Yields                                              Cost             Yield            Fair Value
-------------------------------------------                        ---------        ---------         ------------
<S>                                                                  <C>             <C>                <C>

   Due after one through five years                                $ 1,993,423        5.47%             1,996,319
   Due after ten years (1)                                           6,928,574        5.63%             6,827,506
   Equity securities not due on
     a single maturity date                                          2,744,402        0.00%             9,123,700
   Mortgage-backed securities not due on a
     single maturity date                                            6,060,368        7.28%             6,201,625
                                                                   -----------        ----             ----------
                                                                   $17,726,767        5.30%            24,149,150
                                                                   ===========        ====             ==========
</TABLE>

(1) Consists of government agency and trust preferred securities



                                       13

<PAGE>

Sources of Funds

         General.  The Company's primary sources of funds are deposits,
borrowings, amortization and prepayments on loans and mortgage-backed
securities.

         Deposits. The Bank offers a variety of deposit accounts having a range
of interest rates and terms. The Bank's deposits principally consist of
fixed-term certificates, passbook savings, money market, individual retirement
accounts ("IRAs"), and NOW (checking) accounts. The flow of deposits is
influenced significantly by general economic conditions, changes in money market
and prevailing interest rates, local competition, and competition from non-bank
financial service providers. The Bank's deposits are typically obtained from the
areas in which its offices are located. The Bank relies primarily on customer
service and long-standing relationships with customers to attract and retain
these deposits.

         The Bank seeks to maintain a high level of stable core deposits by
providing convenient and high quality service through its offices.

         The following table sets forth the distribution of the Bank's deposit
accounts at the dates indicated.
<TABLE>
<CAPTION>

Deposit Account Types

                                                                   As of June 30,
                      ----------------------------------------------------------------------------------------------
                                      2001                        2000                             1999
                      ---------------------------    ------------------------------   ------------------------------
                      Average             Percent    Average               Percent    Average               Percent
                      Interest            of Total   Interest              of Total   Interest              of Total
                      Rate       Amount   Deposits   Rate         Amount   Deposits   Rate         Amount   Deposits
                      --------   ------   --------   --------     ------   --------   --------     ------   --------
                                                          (Dollars in Thousands)
<S>                      <C>         <C>    <C>       <C>        <C>         <C>        <C>        <C>       <C>

NOW                     1.49%  $  22,612     13%      1.89%      $  20,482      14%    1.91%       $ 18,068      13%
Savings                 1.98%      7,578      4%      2.72%          8,551       6%    2.23%          8,751       6%
Money Market            3.70%     21,497     13%      4.77%         17,511      12%    3.81%         15,546      11%
Non-interest
   bearing demand       0.00%      6,958      4%      0.00%          6,554       5%    0.00%          4,371       3%
                               ---------     ---                 ---------     ---                ---------     ---
        Total                     58,645     34%                    53,098      37%                  46,736      33%
                               ---------     ---                 ---------     ---                ---------     ---
Certificates of Deposit: (fixed-rate, fixed-term)
     1-11 months        5.38%     70,605     41%      5.44%         64,595      45%    4.40%         15,041      11%
     12-23 months       5.05%     20,158     12%      5.75%         17,379      12%    4.71%         34,874      25%
     24-35 months       5.32%     14,994      9%      5.88%          5,158       4%    5.14%         21,545      15%
     36-47 months       6.19%      3,453      2%      5.47%          1,453       1%    5.48%          8,862       6%
     48-59 months       6.02%        795      1%      6.08%          2,866       2%    5.73%          1,784       1%
     60-71 months       5.91%      1,998      1%      5.94%             58       0%    6.09%          7,752       5%
     72-95 months       0.00%          -      0%      6.24%              -       0%    6.24%          4,543       3%
                               ---------    ---                  ---------     ---                ---------     ---
        Total                    112,003     66%                    91,509      63%                  94,401      67%
                               ---------    ---                  ---------     ---                ---------     ---
Total Deposits                 $ 170,648    100%                 $ 144,607     100%               $ 141,137     100%
                               =========    ===                  =========     ===                =========     ===

</TABLE>



                                       14

<PAGE>

         The following table indicates the approximate amount of the Bank's
certificate accounts of $100,000 or more by time remaining until maturity as of
June 30, 2001.

Maturities of Certificates of Deposit of $100,000 or More

                                                  As of June 30, 2001
                                                  ---------------------
                                                  (Dollars in Thousands)
Three months or less                                  $     1,653
Over three through six months                               1,502
Over six through twelve months                              5,518
Over twelve months                                          3,640
                                                  ---------------------
Total                                                 $    12,313
                                                  =====================

Borrowings

         Deposits are the primary source of funds for the Bank's lending
activities and other general business purposes. However, during periods when
supply of lendable funds cannot meet the demand for such loans, the FHLB System
makes available, subject to compliance eligibility standards, a portion of the
funds necessary through loans (advances) to its members. The following table
presents certain data for Federal Home Loan Bank advances as of June 30 of each
year presented.

Selected Data for Federal Home Loan Bank Advances

                                               2001          2000       1999
                                            ---------     -------    -------
                                                  (Dollars in Thousands)
Remaining maturity as of June 30:

Less than one year                         $  54,401      53,673     21,823
One to two years                               9,690      13,335      7,507
Two to three years                            31,114       3,802     10,335
Three to four years                            6,285      22,233      3,168
Four to five years                             9,587       6,413     22,233
Over five years                               35,580      37,051     39,728
                                           ---------     -------    -------
   Total                                   $ 146,657     136,507    104,794
                                           =========     =======    =======

Weighted average rate as of June 30             5.99%       6.07%      5.71%

For the year ended June 30:

   Average balance                         $ 155,325     114,124     79,985
   Average interest rate                        6.21%       5.94%      5.90%

Maximum outstanding as of any month end    $ 171,006     136,507    104,794


Subsidiary Activity

         The Bank is a subsidiary of the Company. The Bank has one service
corporation subsidiary, Guaranty Financial Services of Springfield, Inc. The
Bank has an investment of $38,000 in its service corporation as of June 30,
2001. The service corporation sells mutual funds, fixed and variable annuities,
unit investment trusts, individual stocks and bonds, and life insurance. Such
sales are completed through an agreement with "INVEST" for providing brokerage
services. The service corporation sells property and casualty insurance through
an agreement with American National Property and Casualty, a Springfield based
insurance company.



                                       15

<PAGE>

Financial Highlights

                                                  Year Ended June 30,
                                   ---------------------------------------
                                    2001            2000          1999
                                   -------       --------        ---------

Dividend Payout Ratio                 61%             60%           57%

Return on Average Assets            0.92%           1.10%         1.19%

Return on Average Equity            6.20%           5.85%         5.15%

Stockholders' Equity to Assets     13.42%          16.55%        20.25%




Employees

         Substantially, all of the activities of the Company are conducted
through the Bank. As of June 30, 2001 the Company has no salaried employees.

         As of September 12, 2001 the Bank has 79 full-time employees and 37
part time employees. None of the Bank's employees are represented by a
collective bargaining group. The Bank believes that its relationship with its
employees is good.

Competition

         The Bank experiences substantial competition both in attracting and
retaining deposit accounts and in the making of mortgage and other loans.

         Direct competition for savings accounts comes from other savings
institutions, credit unions, regional bank and thrift holding companies, and
commercial banks located in its primary market area. Significant competition for
the Bank's other deposit products and services comes from money market mutual
funds, brokerage firms, insurance companies, and retail stores. The primary
factors in competing for loans are interest rates and loan origination fees and
the range of services offered by various financial institutions. Competition for
origination of real estate loans normally comes from other savings institutions,
commercial banks, mortgage bankers, mortgage brokers, and insurance companies.

         The Bank's primary competition comprises the financial institutions
near each of the Bank's offices. In the Springfield metropolitan area, where the
Bank's main office and four branch offices are located, primary competition
consists of one thrift institution and 25 commercial banks and 13 credit unions.

         The Bank believes it is able to compete effectively in its primary
market area by offering competitive interest rates and loan fees, and a variety
of deposit products, and by emphasizing personal customer service.

Regulation

         Set forth below is a brief description of certain laws which relate to
the regulation of the Company and the Bank. The description does not purport to
be complete and is qualified in its entirety by reference to applicable laws and
regulations.



                                       16

<PAGE>

Company Regulation

         General. The Company is a unitary savings and loan holding company
subject to regulatory oversight by the OTS. As such, the Company is required to
register and file reports with the OTS and is subject to regulation and
examination by the OTS. In addition, the OTS has enforcement authority over the
Company and its non-savings bank subsidiaries, which also permits the OTS to
restrict or prohibit activities that are determined to be a serious risk to the
subsidiary savings bank. This regulation and oversight is intended primarily for
the protection of the depositors of the Bank and not for the benefit of
stockholders of the Company.

         Qualified Thrift Lender Test. As a unitary savings and loan holding
company, the Company generally is not subject to activity restrictions, provided
the Bank satisfies the Qualified Thrift Lender ("QTL") test or a somewhat
similar test for domestic building and loan associations. If the Company
acquires control of another savings association as a separate subsidiary, it
would become a multiple savings and loan holding company, and the activities of
the Company and any of its subsidiaries (other than the Bank or any other
SAIF-insured savings association) would become subject to restrictions
applicable to bank holding companies unless such other associations each also
qualifies as a QTL or domestic building and loan association and were acquired
in a supervisory acquisition. See "- Regulation of the Bank - Qualified Thrift
Lender Test."

Regulation of the Bank

         General. As a federally chartered, SAIF insured savings association,
the Bank is subject to extensive regulation by the OTS and the Federal Deposit
Insurance Corporation ("FDIC"). Lending activities and other investments must
comply with various federal statutory and regulatory requirements. The Bank is
also subject to certain reserve requirements promulgated by the Board of
Governors of the Federal Reserve System.

         The OTS, in conjunction with the FDIC, regularly examines the Bank and
prepares reports for the consideration of the Bank's Board of Directors on any
deficiencies that are found in the Bank's operations. The Bank's relationship
with its depositors and borrowers is also regulated to a great extent by federal
and state law, especially in such matters as the ownership of savings accounts
and the form and content of the Bank's mortgage documents.

         The Bank must file reports with the OTS and the FDIC concerning its
activities and financial condition, in addition to obtaining regulatory
approvals prior to entering into certain transactions such as mergers with or
acquisitions of other savings institutions. This regulation and supervision
establishes a comprehensive framework of activities in which an institution can
engage and is intended primarily for the protection of the SAIF and depositors.
The regulatory structure also gives the regulatory authorities extensive
discretion in connection with their supervisory and enforcement activities and
examination policies, including policies with respect to the classification of
assets and the establishment of adequate loan loss reserves for regulatory
purposes. Any change in such regulations, whether by the OTS, the FDIC, or the
Congress, could have a material adverse impact on the Company, the Bank, and
their operations.

         Insurance of Deposit Accounts. The deposit accounts held by the Bank
are insured by the SAIF to a maximum of $100,000 for each insured member (as
defined by law and regulation). Insurance of deposits may be terminated by the
FDIC upon a finding that the institution has engaged in unsafe or unsound
practices, is in an unsafe or unsound condition to continue operations or has
violated any applicable law, regulation, rule, order or condition imposed by the
FDIC or the institution's primary regulator.


         The FDIC charges an annual assessment for the insurance of deposits
basedon the risk a particular institution poses to its deposit insurance fund.
Under this system, SAIF members pay within a range of 0 cents to 27 cents per
$100 of domestic deposits, depending upon the institution's risk classification.
Risk classification is based on an institution's capital group and supervisory
subgroup assignment. In addition, all FDIC-insured institutions are required to
pay assessments to the FDIC at an annual rate of approximately .0212% of insured
deposits to fund interest payments on bonds issued by the Financing Corporation
("FICO"), an agency of the Federal government established to recapitalize the
predecessor to the SAIF. These assessments will continue until the FICO bonds
mature in 2017.

                                       17

<PAGE>

         Regulatory Capital Requirements. OTS capital regulations require
savings associations to meet three capital standards: (1) a tangible capital
requirement of 1.5% of total adjusted assets, (2) a leverage ratio (core
capital) requirement of 4% of total adjusted assets and (3) a risk-based capital
requirement equal to 8% of total risk-weighted assets. Regulations that enable
the OTS to take prompt and corrective action against savings associations
effectively impose higher capital requirements on savings associations.

         Dividend and Other Capital Distribution Limitations. The Bank must give
the OTS 30 days advance notice of any proposed declaration of dividends to the
Company, and the OTS has the authority under its supervisory powers to prohibit
the payment of dividends to the Company. In addition, the Bank may not declare
or pay a cash dividend on its capital stock if the dividend would (1) reduce the
regulatory capital of the Bank below the amount required for the liquidation
account established in connection with the conversion from mutual to stock form
or (2) reduce the amount of capital of the Bank below the amounts required in
accordance with other OTS regulations. In contrast, the Company has fewer
restrictions on the payment of dividends.

         Qualified Thrift Lender Test. Savings institutions must meet either the
QTL test pursuant to OTS regulations or the definition of a domestic building
and loan association in section 7701 of the Internal Revenue Code (the "Code").
If the Bank maintains an appropriate level of certain specified investments
(primarily residential mortgages and related investments, including certain
mortgage-related securities) and otherwise qualifies as a QTL or a domestic
building and loan association, it will continue to enjoy full borrowing
privileges from the FHLB of Des Moines. The required percentage of investments
under the QTL test is 65% of assets while the Code requires investments of 60%
of assets. A bank must be in compliance with the QTL test or definition of
domestic building and loan association on a monthly basis in nine out of every
12 months.

         Federal Reserve System. The Board of Governors of the Federal Reserve
System requires all depository institutions to maintain non-interest bearing
reserves at specified levels against their transaction accounts (primarily
checking, NOW, and Super NOW checking accounts) and non-personal time deposits.

Executive Officers of the Registrant

         Set forth below is information concerning the three executive officers
of the Company.

         James E. Haseltine joined the Bank in 1983, and has served as Director,
president and Chief Executive Officer since 1990. Mr. Haseltine has held the
same positions with the Company since its formation in September 1997. After
graduating Drury College in 1968, he entered military service with the U.S. Army
and served in the Republic of Vietnam. He has served as a founding member and
Chairman of the Affordable Housing Action Board of Springfield, Inc., an
organization serving low to moderate income families. He is a licensed real
estate broker.

         Currently, he serves as a director of America's Community Bankers, a
national trade organization serving financial institutions, is President of the
Springfield Business and Development Corporation, a director of the Home
Builders Association of Springfield, and a director of the Springfield Public
Schools Foundation. He is a member of First and Calvary Presbyterian Church.


         William B. Williams joined the Bank in 1995 as Executive Vice President
and Chief Operating Officer. Mr. Williams has held the same positions with the
Company since its formation in September 1997. Prior to joining the Bank, Mr.
Williams worked as a consultant to Midland Loan Services, L.P., a commercial
mortgage banker in Kansas City, Missouri. From 1987 to 1994, Mr. Williams worked
for North American Savings Bank in Grandview, Missouri, most recently as
Executive Vice President and Chief Financial Officer. Mr. Williams received a
BSBA degree from the University of Arkansas in 1969 and after serving as an
officer in the U.S. Navy, he received a MBA degree from Tulane University in
1974. He is a CPA.

         Bruce Winston is Senior Vice President and Chief Financial Officer of
the Bank. He joined the Bank in 1992. Mr. Winston has held the same positions
with the Company since its formation in September 1997. Prior to joining the
Bank, he served in various other capacities with two other financial
institutions over a period of 20 years. He is a graduate of Southwest Missouri
State University.


                                       18

<PAGE>

         As of June 30, 2001, the years of age of these individuals was 54 for
Mr. Haseltine, 54 for Mr. Williams and 53 for Mr. Winston.

Item 2. Properties

         The offices of the Company are located in the main office of the Bank.

         The Bank's office facilities currently consist of the main office in
Springfield, Greene County, Missouri and three full-service branch offices in
Springfield and one in-store branch located in the Walmart Supercenter in Nixa,
Christian County, Missouri. The Bank has a relatively new main office building,
which provides the Bank with a modern office for customer services and projects
a favorable image for the Bank in the local marketplace.

Item 3. Legal Proceedings

         The Company and the Bank, from time to time, may be parties to ordinary
routine litigation, which arises in the normal course of business, such as
claims to enforce liens, condemnation proceedings, on properties in which the
Bank holds security interests, claims involving the making and servicing of real
property loans, and other issues incident to the business of the Company and the
Bank. As of June 30, 2001, there were no claims or lawsuits pending or known to
be contemplated against the Company or the Bank that would have had a material
effect on the Company or the Bank.

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

         No matter was submitted to a vote of security holders during the fourth
quarter of the fiscal year.

PART II

Item  5.  Market for Registrant's Common Equity and Related Stockholder Matters

         The information on page 1 of the Annual Report to Stockholders of the
Registrant for the fiscal year ended June 30, 2001 (the "2001 Annual Report") is
incorporated herein by reference. Dividends paid information on pages 9 and 11
of the 2001 Annual Report is incorporated herein by reference.

Item 6.  Selected Financial Data

         The information contained on page 3 of the 2000 Annual Report is
incorporated herein by reference.

Item 7.  Management's Discussion and Analysis of Financial Conditions and
         Results of Operations

         The information contained on pages 4 through 14 of the 2001 Annual
Report is incorporated herein by reference.



                                       19

<PAGE>

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

         The information contained on pages 11 and 12 under the headings
"Asset/Liability Management" and "Interest Rate Sensitivity Analysis" of the
2001 Annual Report is incorporated herein by reference.

Item  8.  Financial Statements and Supplementary Data

         The financial statements set forth on pages 15 to 41 of the 2001 Annual
Report, are incorporated herein by reference.

Item 9.  Changes in and Disagreements with Accountants On Accounting and
         Financial Disclosure

         Not applicable.


PART III

Item 10.  Directors and Executive Officers of the Registrant

         The information contained under the section captioned "First Proposal,
Election of Directors" in the proxy statement for the Annual Meeting of
Stockholders to be held October 24, 2001 (the "Proxy Statement") is incorporated
herein by reference.

         Additional information concerning executive officers and directors is
included in the Proxy Statement in the section captioned "Section 16(a)
Beneficial Ownership Reporting Compliance" and under "Executive Officers of the
Registrant" in Item 1 of this report.

Item 11.  Executive Compensation

         The information contained in the sections captioned "Directors
Compensation", "Executive Compensation", "Compensation Committee Interlocks and
Insider Participation", " "Summary Compensation Table," "Employment Agreements,"
and "Aggregated Option/SAR Exercises and Fiscal Year end Option/SAR Values," in
the Proxy Statement is incorporated herein by reference.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

         (a)      Security Ownership of Certain Beneficial Owners
                  Information required by this item is incorporated herein by
                  reference to the section captioned "Voting Securities and
                  Principal Holders Thereof" in the Proxy Statement.

         (b)      Security Ownership of Management
                  Information required by this item is incorporated herein by
                  reference to the second chart in the section captioned "Voting
                  Securities and Principal Holders Thereof" in the Proxy
                  Statement.

         (c)      Not applicable.

Item 13.  Certain Relationships and Related Transactions

         The information required by this item is incorporated herein by
reference to the section captioned "Transactions with Certain Related Persons"
in the Proxy Statement.



                                       20

<PAGE>

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K

         (a)      The following documents are filed as a part of this report:

                  1. The following financial statements and the report of
                  independent accountants included in the 2001 Annual Report are
                  incorporated herein by reference and also in Item 8 of this
                  report.

                  Independent Accountants' Report

                  Consolidated Balance Sheets as of June 30, 2001 and 2000.

                  Consolidated Statements of Income for the Years Ended June 30,
                  2001, 2000, and 1999.

                  Consolidated Statements of Changes in Stockholders' Equity for
                  the Years Ended June 30, 2001, 2000, and 1999.

                  Consolidated Statements of Cash Flows for the Years Ended June
                  30, 2001, 2000, and 1999.

                  Notes to Consolidated Financial Statements.

                  2. Financial Statement Schedules for which provision is made
                  in the applicable accounting regulations of the SEC are not
                  required under the related instructions or are inapplicable
                  and therefore have been omitted.

                  3. The following exhibits are included in this Report or
                  incorporated herein by reference:
                  (a)   List of Exhibits:
                  3(i)  Certificate of Incorporation of Guaranty Federal
                        Bancshares, Inc.*
                  3(ii) Bylaws of Guaranty Federal Bancshares, Inc.*
                  4     Rights Agreement dated January 20, 1999 concerning the
                        issuance of preferred stock and related rights. **
                  10.1  1994 Stock Option Plan***
                  10.2  Recognition and Retention Plan****
                  10.3  1998 Stock Option Plan*****
                  10.4  Restricted Stock Plan******
                  10.5  Change in Control Severance Agreements
                  10.6  2000 Stock Compensation Plan
                  10.7  2001 Stock Compensation Plan
                  13    Annual Report to Stockholders for the fiscal year ended
                        June 30, 2001 (only those portions incorporated by
                        reference in this document are deemed "filed")
                  21    Subsidiaries of the Registrant*
                  23    Consent of BKD, LLP
         (b) No reports on Form 8-K were filed during the last quarter of the
period covered by this report.

---------------------

*        Incorporated by reference to the identically numbered exhibit of the
         Annual Report on Form 10-K for the fiscal year ended June 30, 1998 (SEC
         file number 0-23325).

**       Incorporated by reference to the identically numbered exhibit of the
         Form 8A filed by Registrant on January 22, 1999.

***      Incorporated by reference to Exhibit 10.1 of the Registration Statement
         on Form S-1 filed by the Registrant on September 22, 1997 (SEC file
         number 333-36141).

****     Incorporated by reference to Exhibit 10.2 of the Registration Statement
         on Form S-1 filed by the Registrant on September 22, 1997 (SEC file
         number 333-36141).

*****    Incorporated by reference to Exhibit A of the proxy statement for a
         special meeting of stockholders held on July 22, 1998 (SEC file number
         0-23325).

******   Incorporated by reference to Exhibit B of the proxy statement for a
         special meeting of stockholders held on July 22, 1998 (SEC file number
         0-23325).


                                       21

<PAGE>


                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                         GUARANTY FEDERAL BANCSHARES, INC.

Dated:  September 20, 2001             By: /s/ James E. Haseltine
                                           -----------------------------------
                                           James E. Haseltine
                                           President and Chief Executive Officer
                                           (Duly Authorized Representative)

         Pursuant to the requirement of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
<S>                                                             <C>

By:      /s/ James E. Haseltine                      By:      /s/ Ivy L. Rogers
         -----------------------------------                  -----------------------------------
         James E. Haseltine                                   Ivy L. Rogers
         President and Chief Executive Officer                Director
         (Principal Executive Officer)
Date:    September 20, 2001                          Date:    September 20, 2001


By:      /s/ Bruce Winston                           By:      /s/ Gary Lipscomb
         -----------------------------------                  -----------------------------------
         Bruce Winston                                        Gary Lipscomb
         SVP and Chief Financial Officer                      Director
         (Principal Accounting and Financial
         Officer)
Date:    September 20, 2001                          Date:    September 20, 2001


By:      /s/ Wayne V. Barnes                         By:      /s/ Jack L. Barham
         -----------------------------------                  -----------------------------------
         Wayne V. Barnes                                      Jack L. Barham
         Director                                             Chairman of the Board and Director
Date:    September 20, 2001                          Date:    September 20, 2001


By:      /s/ Gregory V. Ostergren                    By:      /s/ Raymond D. Tripp
         -----------------------------------                  -----------------------------------
         Gregory V. Ostergren                                 Raymond D. Tripp
         Director                                             Director
Date:    September 20, 2001                          Date:    September 20, 2001


By:      /s/ Kurt D. Hellweg
         -----------------------------------
         Kurt D. Hellweg
         Director
Date:    September 20, 2001

</TABLE>