BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
WASHINGTON, DC 20551

December 20, 2017

Mark Chorazak, Esq.

Simpson Thacher & Bartlett LLP
425 Lexington Avenue

New York, New York 10017

Dear Mr. Chorazak:

This letter responds to your request on behalf of Castle Creek Capital
Partners V (“Fund V”), Rancho Santa Fe, California, for modification of commitments
(Commitments”) that Fund V and certain of its affiliates and investors! (collectively,
“Castle Creek”) made to the Board in connection with a notice filed by Castle Creek
pursuant to the Change in Bank Control Act? to acquire up to 24.9 percent of the voting
shares of Guaranty Federal Bancshares, Inc. (“Guaranty”), Springfield, Missouri. The
Commitments were intended to ensure that Castle Creek would not exercise or attempt to
exercise a controlling influence over Guaranty for purposes of the Bank Holding
Company Act of 1956, as amended.

The Commitments provide that Castle Creek may not have or seek to have
a representative serve on the board of directors of Guaranty or any of its subsidiaries.
Castle Creek seeks a modification of the Commitments to allow it to have or seek to have
one representative on Guaranty’s board. Castle Creek has represented that it is in
compliance with the Commitments. Castle Creek currently controls 20.8 percent of the
voting shares of Guaranty.

' These affiliates and investors are Castle Creek Capital V LLC, Castle Creek Advisors
IV LLC, JME Advisory Corp., Legions IV Corp., Mikesell Advisory Corp., Pietrzak
Advisory Corp., Scavuzzo Advisory Corp., Volk Advisory Corp., Rana Advisory Corp.,
Szumski Advisory Corp., Arch Investment Holdings I Ltd., Arch Reinsurance Ltd., Arch
Capital Group Ltd., Arizona PSPRS Trust, Mayo Clinic, and Mayo Clinic Master
Retirement Trust.

2 12 U.S.C. § 1817(j).


Castle Creek’s proposal is consistent with Board policies and precedent
restricting an investor’s ability to exercise a controlling influence over the management
or policies of a banking organization. The Board’s September 2008 policy statement on
equity investments in banks and bank holding companies’ provides that a minority
investor generally should be able to have a single representative on the board of directors
of a banking organization without acquiring a controlling influence over that
organization’s management or policies. Permitting Castle Creek to have a single
representative on the board of directors of Guaranty is consistent with that policy.
Moreover, Castle Creek would remain subject to all other provisions of the
Commitments, including that Castle Creek not exercise or attempt to exercise a
controlling influence over Guaranty.

Based on all the facts of record, the Director of the Division of Supervision
and Regulation, acting pursuant to authority delegated by the Board under section
265.7(a)(2) of the Board’s Rules Regarding Delegation of Authority,* and after
consulting with the General Counsel, has approved Castle Creek’s request for
modification of the Commitments to allow Castle Creek to have or seek to have a
representative on Guaranty’s board.> This action is based on the representations and
commitments provided in your communications and correspondence related to your
request, including the representations discussed above. The commitments are conditions
imposed in writing in connection with the Board’s decision and, as such, may be enforced
in proceedings under applicable law. Any change in the facts presented could result in a
different conclusion and should be reported to Board staff immediately. This
determination should not be construed as granting relief from any other conditions or
commitments to which Castle Creek may be subject.

Very truly yours,

N\maoate MW Band
MargaretMcCloskey Shanks
Deputy Secretary of the Board

3 See https://www.federalreserve.gov/newsevents/pressreleases/bcreg20080922c.htm.
4 12 CFR 265.7(a)(2).

5 In addition to allowing Castle Creek to have or seek to have a representative on
Guaranty’s board, the modification would impose limitations on the director’s service on
certain of the board’s committees.