UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-Q

(Mark One)

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

                    For the quarter ended September 30, 2002

                                       OR

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

                For the transition period from _______ to _______

Commission number 0-23325

                        Guaranty Federal Bancshares, Inc.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

           Delaware                                        43-1792717
-------------------------------                ---------------------------------
(State or other jurisdiction of                (IRS Employer Identification No.)
incorporation or organization)

    1341 West Battlefield
     Springfield, Missouri                                   65807
     ---------------------                                   -----
     (Address of principal                                 (Zip Code)
      executive offices)

                        Telephone Number: (417) 520-4333

      Indicate by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Sections 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  the  number of shares  outstanding  of each of the  registrant's
classes of common stock, as of the latest practicable date.

           Class                                 Outstanding at November 8, 2002
           -----                                 -------------------------------
Common Stock, Par Value $0.10                           3,035,188 Shares
<PAGE>

                        GUARANTY FEDERAL BANCSHARES, INC.
                                    Form 10-Q

                                TABLE OF CONTENTS

Item                                                                        Page
                          PART I. Financial Information

1. Consolidated Financial Statements (Unaudited):
      Statements of Financial Condition                                      3

      Statements of Income                                                   4

      Statements of  Stockholders' Equity                                    5

      Statements of Cash Flows                                               7

      Notes to Consolidated Financial Statements                             8

2.  Management's Discussion and Analysis of Financial
    Condition and Results of Operations                                      9

3. Quantitative and Qualitative Disclosures about Market Risk               14

4. Control and Procedures                                                   16

                           PART II. Other Information

1. Legal Proceedings                                                        17

2. Changes in Securities                                                    17

3. Defaults Upon Senior Securities                                          17

4. Submission of Matters to Vote of Common Stockholders                     17

5. Other Information                                                        17

6. Exhibits and Reports on Form 8-K                                         17

Signatures

Certification of the Principal Executive Officer

Certification of the Principal Financial Officer


                                       2
<PAGE>

           PART I
Item 1. Financial Statements

                        GUARANTY FEDERAL BANCSHARES, INC.
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                SEPTEMBER 30, 2002 (UNAUDITED) AND JUNE 30, 2002

<TABLE>
<CAPTION>
                                   ASSETS                                                           9/30/02              6/30/02
                                                                                                 -------------        -------------
<S>                                                                                              <C>                    <C>
Cash                                                                                             $   3,205,779            3,251,579
Interest-bearing deposits in other financial institutions                                           12,863,111           13,711,923
                                                                                                 -------------        -------------
  Cash and cash equivalents                                                                         16,068,890           16,963,502
Available-for-sale securities                                                                       15,789,744           16,463,460
Held-to-maturity securities                                                                          2,954,398            3,219,091
Stock in Federal Home Loan Bank, at cost                                                             8,600,400            8,600,400
Mortgage loans held for sale                                                                         5,130,714            3,131,138
Loans receivable, net of allowance for loan losses;
  9/30/02 - $2,633,639; 6/30/02 $2,649,872                                                         318,309,989          316,785,118
Accrued interest receivable:
  Loans                                                                                              1,503,546            1,569,260
  Investments                                                                                           70,107               85,251
Prepaid expenses and other assets                                                                    1,682,050            2,082,897
Foreclosed assets held for sale                                                                        109,861              683,329
Premises and equipment                                                                               7,217,818            7,356,098
                                                                                                 -------------        -------------
                                                                                                 $ 377,437,517          376,939,544
                                                                                                 =============        =============
                    LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits                                                                                         $ 222,689,772          223,652,319
Federal Home Loan Bank advances                                                                    111,912,947          111,083,163
Securities sold under agreements to repurchase                                                         847,929            1,093,074
Advances from borrowers for taxes and insurance                                                      1,391,698            1,048,297
Accrued expenses and other liabilities                                                               1,910,733            2,124,805
Accrued interest payable                                                                               905,842              759,099
Dividend payable                                                                                       417,197              347,656
Income taxes payable                                                                                   462,734              163,897
Deferred income taxes                                                                                1,184,173            1,232,357
                                                                                                 -------------        -------------
                                                                                                   341,723,025          341,504,667
                                                                                                 -------------        -------------
STOCKHOLDERS' EQUITY
Common stock:
  $0.10 par value; authorized 10,000,000 shares;
    issued; 9/30/02 - 6,368,687 shares, 6/30/02 - 6,365,404 shares                                     636,869              636,540
Additional paid-in capital                                                                          49,984,387           49,842,032
Unearned ESOP shares                                                                                (2,343,570)          (2,406,070)
Retained earnings, substantially restricted                                                         27,851,784           27,372,935
Accumulated other comprehensive income
  Unrealized appreciation on available-for-sale securities,
  net of income taxes; 9/30/02 - $1,520,844, 6/30/02 - $1,731,122                                    2,588,704            2,947,587
                                                                                                 -------------        -------------
                                                                                                    78,718,174           78,393,024
Treasury stock, at cost; 9/30/02 - 3,336,304 shares, 6/30/02 - 3,333,089 shares                    (43,003,682)         (42,958,147)
                                                                                                 -------------        -------------
                                                                                                    35,714,492           35,434,877
                                                                                                 -------------        -------------
                                                                                                 $ 377,437,517          376,939,544
                                                                                                 =============        =============
</TABLE>

See Notes to Condensed Consolidated Financial Statements


                                       3
<PAGE>

                        GUARANTY FEDERAL BANCSHARES, INC.
                        CONSOLIDATED STATEMENTS OF INCOME
           THREE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001 (UNAUDITED)

<TABLE>
<CAPTION>
                                                                            9/30/02               9/30/01
                                                                          -----------           -----------
<S>                                                                       <C>                     <C>
INTEREST INCOME
Loans                                                                     $ 5,488,439             6,360,382
Investment securities                                                         125,994               193,725
Other                                                                         132,023               187,369
                                                                          -----------           -----------
     Total Interest Income                                                  5,746,456             6,741,476
                                                                          -----------           -----------
INTEREST EXPENSE
Deposits                                                                    1,616,380             1,807,373
Federal Home Loan Bank advances                                             1,500,718             2,133,283
Other                                                                           3,077                12,188
                                                                          -----------           -----------
     Total Interest Expense                                                 3,120,175             3,952,844
                                                                          -----------           -----------
Net Interest Income                                                         2,626,281             2,788,632
Provision for Loan Losses                                                     100,000                75,000
                                                                          -----------           -----------
Net Interest Income after
     Provision for Loan Losses                                              2,526,281             2,713,632
                                                                          -----------           -----------
NONINTEREST INCOME
Service charges                                                               440,580               353,025
Late charges and other fees                                                   156,851                29,018
Gain on loans and investment securities                                       224,577               342,498
Loss on foreclosed assets                                                      (4,793)                   --
Other income                                                                   46,237                65,195
                                                                          -----------           -----------
     Total Noninterest Income                                                 863,452               789,736
                                                                          -----------           -----------
NONINTEREST EXPENSE
Salaries and employee benefits                                              1,121,186             1,081,705
Occupancy                                                                     336,803               318,133
SAIF deposit insurance premiums                                                 9,859                 6,956
Data processing fees                                                          141,140               134,622
Advertising                                                                    49,113                78,412
Other expense                                                                 368,128               386,463
                                                                          -----------           -----------
     Total Noninterest Expense                                              2,026,229             2,006,291
                                                                          -----------           -----------
Income Before Income Taxes                                                  1,363,504             1,497,077
Provision for Income Taxes                                                    467,458               527,997
                                                                          -----------           -----------
NET INCOME                                                                    896,046               969,080
OTHER COMPREHENSIVE LOSS
Unrealized depreciation on
     available-for-sale securities, net of income taxes of ($210,278)
     and ($264,339) for 2002 and 2001, respectively                          (358,883)             (450,091)
                                                                          -----------           -----------
COMPREHENSIVE INCOME                                                      $   537,163               518,989
                                                                          ===========           ===========
BASIC EARNINGS PER SHARE                                                  $      0.32                  0.25
                                                                          ===========           ===========
DILUTED EARNINGS PER SHARE                                                $      0.32                  0.25
                                                                          ===========           ===========
</TABLE>

See Notes to Condensed Consolidated Financial Statements


                                       4
<PAGE>

                        GUARANTY FEDERAL BANCSHARES, INC.
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                THREE MONTHS ENDED SEPTEMBER 30, 2002 (UNAUDITED)

<TABLE>
<CAPTION>
                                                               Additional
                                                Common           Paid-In         Unearned          Retained
                                                 Stock           Capital        ESOP Shares        Earnings
                                              -----------      -----------      -----------       -----------
<S>                                           <C>               <C>              <C>               <C>
Balance, July 1, 2002                         $   636,540       49,842,032       (2,406,070)       27,372,935
Net income                                             --               --               --           896,046
Dividends on common stock,
($0.15 per share on 3,781,315 shares)                  --               --               --          (417,197)
Stock award plans                                      --           97,549               --                --
Stock options exercised                               329           19,506               --                --
Release of ESOP shares                                 --           25,300           62,500                --
Treasury stock purchased                               --               --               --                --
Change in unrealized appreciation on
  available-for-sale securitites, net of
  income taxes of ($210,278)                           --               --               --                --
                                              -----------      -----------      -----------       -----------
Balance, September 30, 2002                   $   636,869       49,984,387       (2,343,570)       27,851,784
                                              ===========      ===========      ===========       ===========

<CAPTION>
                                                Accumulated Other
                                              Comprehensive Income
                                              --------------------
                                                    Unrealized
                                                  Appreciation on
                                                Available-for-Sale     Treasury
                                                  Securities, Net        Stock             Total
                                              --------------------    -----------       -----------
<S>                                                   <C>             <C>                <C>
Balance, July 1, 2002                                 2,947,587       (42,958,147)       35,434,877
Net income                                                   --                --           896,046
Dividends on common stock,
($0.15 per share on 3,781,315 shares)                        --                --          (417,197)
Stock award plans                                            --                --            97,549
Stock options exercised                                      --                --            19,835
Release of ESOP shares                                       --                --            87,800
Treasury stock purchased                                     --           (45,535)          (45,535)
Change in unrealized appreciation on
  available-for-sale securitites, net of
  income taxes of ($210,278)                           (358,883)               --          (358,883)
                                                    -----------       -----------       -----------
Balance, September 30, 2002                           2,588,704       (43,003,682)       35,714,492
                                                    ===========       ===========       ===========
</TABLE>

See Notes to Condensed Consolidated Financial Statements


                                       5
<PAGE>

                        GUARANTY FEDERAL BANCSHARES, INC.
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                THREE MONTHS ENDED SEPTEMBER 30, 2001 (UNAUDITED)

<TABLE>
<CAPTION>
                                                             Additional
                                              Common           Paid-In         Unearned          Retained
                                               Stock           Capital        ESOP Shares        Earnings
                                            -----------      -----------      -----------       -----------
<S>                                         <C>               <C>              <C>               <C>
Balance, July 1, 2001                       $   626,840       48,451,515       (2,640,800)       25,951,537
Net income                                           --               --               --           969,080
Dividends on common stock,
($0.25 per share on 3,800,279 shares)                --               --               --          (950,070)
Stock award plans                                    --          101,911               --                --
Stock options exercised                           2,564          169,962               --                --
Release of ESOP shares                               --           17,157           57,410                --
Treasury stock purchased                             --               --               --                --
Change in unrealized appreciation on
  available-for-sale securitites, net of
  income taxes of ($264,339)                         --               --               --                --
                                            -----------      -----------      -----------       -----------
Balance, September 30, 2001                 $   629,404       48,740,545       (2,583,390)       25,970,547
                                            ===========      ===========      ===========       ===========

<CAPTION>
                                                Accumulated Other
                                              Comprehensive Income
                                              --------------------
                                                    Unrealized
                                                  Appreciation on
                                                Available-for-Sale     Treasury
                                                  Securities, Net        Stock             Total
                                              --------------------    -----------       -----------
<S>                                                 <C>               <C>                <C>
Balance, July 1, 2001                               3,948,203         (26,131,504)       50,205,791
Net income                                                 --                  --           969,080
Dividends on common stock,
($0.25 per share on 3,800,279 shares)                      --                  --          (950,070)
Stock award plans                                          --                  --           101,911
Stock options exercised                                    --                  --           172,526
Release of ESOP shares                                     --                  --            74,567
Treasury stock purchased                                   --            (204,875)         (204,875)
Change in unrealized appreciation on
  available-for-sale securitites, net of
  income taxes of ($264,339)                         (450,091)                 --          (450,091)
                                                  -----------         -----------       -----------
Balance, September 30, 2001                         3,498,112         (26,336,379)       49,918,839
                                                  ===========         ===========       ===========
</TABLE>

See Notes to Condensed Consolidated Financial Statements


                                       6
<PAGE>

                        GUARANTY FEDERAL BANCSHARES, INC
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
           THREE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001 (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                 9/30/02                  9/30/01
                                                                                               ------------            ------------
<S>                                                                                            <C>                      <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                                                                     $    896,046                 969,080
Items not requiring (providing) cash:
Deferred income taxes                                                                               162,094                  62,214
Depreciation                                                                                        200,693                 222,877
Provision for loan losses                                                                           100,000                  75,000
Gain on loans and investment securities                                                            (224,577)               (342,498)
Loss on sale of foreclosed assets                                                                     2,973                      --
Amortization of deferred income, premiums and discounts                                               1,047                 (27,823)
RRP/RSP expense                                                                                      89,998                 123,560
Origination of loans held for sale                                                              (15,680,114)            (13,539,408)
Proceeds from sale of loans held for sale                                                        13,905,115              12,054,893
Release of ESOP shares                                                                               87,800                  74,567
Changes in:
Accrued interest receivable                                                                          80,858                 165,847
Prepaid expenses and other assets                                                                   400,847                (329,436)
Accounts payable and accrued expenses                                                               (67,329)                741,067
Income taxes payable                                                                                305,766                 464,889
                                                                                               ------------            ------------
           Net cash provided by operating activities                                                261,217                 714,829
                                                                                               ------------            ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Net increase in loans                                                                            (1,804,261)             (4,928,695)
Principal payments on available-for-sale securities                                                 101,307                 495,196
Principal payments on held-to-maturity securities                                                   271,392                 423,340
Proceeds from maturities of available-for-sale securities                                         3,000,000               2,000,000
Purchase of premises and equipment                                                                  (62,413)                (48,345)
Purchase of available-for-sale securities                                                        (2,978,928)             (4,915,229)
Proceeds from sale of available-for-sale securities                                                      --                 402,342
Proceeds from sale of foreclosed assets                                                             724,315                   4,200
                                                                                               ------------            ------------
          Net cash used in investing activities                                                    (748,588)             (6,567,191)
                                                                                               ------------            ------------
 CASH FLOWS FROM FINANCING ACTIVITIES
Stock options exercised                                                                              19,835                 172,526
Cash dividends paid                                                                                (347,656)                     --
Cash dividends received on RRP stock                                                                    622                      --
Net increase in demand deposits,
NOW accounts and savings accounts                                                                 4,563,088               4,942,036
Net increase (decrease) in certificates of deposit and securities sold
     under agreements to repurchase                                                              (5,770,780)              5,666,655
Proceeds from FHLB advances                                                                       5,000,000              24,500,000
Repayments of FHLB advances                                                                      (4,170,216)            (30,755,629)
Advances from borrowers for taxes and insurance                                                     343,401                 393,359
Treasury stock purchased                                                                            (45,535)               (204,875)
                                                                                               ------------            ------------
     Net cash provided by (used in) financing activities                                           (407,241)              4,714,072
                                                                                               ------------            ------------
DECREASE IN CASH AND CASH EQUIVALENTS                                                              (894,612)             (1,138,290)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                                   16,963,502              10,313,558
                                                                                               ------------            ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD                                                       $ 16,068,890               9,175,268
                                                                                               ============            ============
</TABLE>

See Notes to Condensed Consolidated Financial Statements


                                       7
<PAGE>

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note 1: Basis of Presentation

      The accompanying  unaudited interim consolidated financial statements have
been prepared in accordance with generally  accepted  accounting  principles for
interim  financial  information and with the  instructions to Form 10-Q and Rule
10-01 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting  principles for complete
financial statements. In the opinion of management,  all adjustments (consisting
only of normal recurring accruals)  considered necessary for a fair presentation
have been included.

      The results of operations for the period are not necessarily indicative of
the results to be expected for the full year.

      These  condensed  consolidated  financial  statements  should  be  read in
conjunction  with  the  consolidated  financial  statements  and  notes  thereto
included  in the  Company's  Form 10-K  annual  report  for 2002  filed with the
Securities and Exchange Commission.  The condensed consolidated balance sheet of
the Company as of June 30, 2002, has been derived from the audited  consolidated
balance  sheet of the  Company as of that  date.  Certain  information  and note
disclosures  normally  included in the  Company's  annual  financial  statements
prepared in accordance with generally accepted  accounting  principles have been
condensed or omitted.

Note 2: Principles of Consolidation

      The accompanying consolidated financial statements include the accounts of
Guaranty Federal Bancshares,  Inc. (the "Company"), its wholly owned subsidiary,
Guaranty  Federal Savings Bank (the "Bank") and the  wholly-owned  subsidiary of
the Bank,  Guaranty  Financial  Services of  Springfield,  Inc. All  significant
intercompany transactions and balances have been eliminated in consolidation.

Note 3: Benefit Plans

      The  Company  has  established  four stock  award plans for the benefit of
certain  directors,  officers and employees of the Bank and its subsidiary.  The
plans  provide a  proprietary  interest in the  Company in a manner  designed to
encourage  these  individuals to remain with the Bank. A Committee of the Bank's
Board of Directors  administers the plans.  The Company accounts for the cost of
share  purchases  under the plans as a reduction of  stockholders'  equity.  The
awards  vest at the rate of 20% per year over a five-year  period.  Compensation
expense is recognized  based on the Company's stock price on the date the shares
are awarded to employees.

      On October  18,  1995,  the Bank's  stockholders  voted to approve  both a
Recognition and Retention Plan ("RRP") and a Stock Option Plan ("SOP").  On July
22, 1998,  the Company's  stockholders  voted to approve both a 1998  Restricted
Stock Plan  ("RSP") and a 1998 Stock Option Plan ("1998  SOP").  The RRP and RSP
authorized shares to be issued to directors, officers and employees of the Bank.
On February 17, 2000,  the directors of the Company  established  the 2000 Stock
Compensation Plan (the "2000 SCP") with both a stock award component and a stock
option  component.  On March 22, 2001, the directors of the Company  established
the 2001  Stock  Compensation  Plan (the  "2001  SCP")  with both a stock  award
component and a stock option  component.  As of September  30, 2002,  all of the
RRP,RSP,  2000 SCP and 2001 SCP shares have been  purchased and all except 7,837
shares have been awarded. The Company is amortizing the RRP, RSP and SCP expense
over each  participant's  vesting  period.  The Company  recognized  $89,998 and
$123,560 of expense  under  these stock award plans for the three month  periods
ended September 30, 2002 and 2001, respectively.  The SOP, 1998 SOP and the 2000
SCP authorized stock options on shares to be issued to officers and employees of
the Bank,  as of September  30, 2002 all options  except those on 63,703  shares
have been granted. The RRP, RSP, SOP,1998 SOP and 2000 SCP vest over a five year
period.  As of September 30, 2002, there were 422,497  unexercised  options that
have been  granted at prices  ranging  from $5.83 to $13.89 per share and 46,949
RRP, RSP, 2000 SCP and 2001 SCP shares were unvested.


                                       8
<PAGE>

Note 4: Earnings Per Share

<TABLE>
<CAPTION>
                                                              For three months ended September 30, 2002
                                                    -----------------------------------------------------------
                                                                               Average
                                                    Income Available            Shares
                                                     to Stockholders          Outstanding             Per-share
                                                    ----------------          -----------             ---------
<S>                                                     <C>                    <C>                    <C>
Basic Earnings per Share                                $ 896,046              2,793,044              $    0.32
                                                        =========                                     =========
Effect of Dilutive Securities: Stock Options                                      48,309
                                                                               ---------
Diluted Earnings per Share                              $ 896,046              2,841,353              $    0.32
                                                        =========              =========              =========

<CAPTION>
                                                              For three months ended September 30, 2001
                                                    -----------------------------------------------------------
                                                                               Average
                                                    Income Available            Shares
                                                     to Stockholders          Outstanding             Per-share
                                                    ----------------          -----------             ---------
<S>                                                     <C>                    <C>                    <C>
Basic Earnings per Share                                $ 969,080              3,807,070              $    0.25
                                                        =========                                     =========
Effect of Dilutive Securities: Stock Options                                      46,201
                                                                               ---------
Diluted Earnings per Share                              $ 969,080              3,853,271              $    0.25
                                                        =========              =========              =========
</TABLE>

Item 2. Management's Discussion and Analysis of Financial Condition and Results
        of Operations

General

      The primary  function of the Company has been to monitor its investment in
the Bank.  As a result,  the  results of  operations  of the Company are derived
primarily  from  operations of the Bank.  The Bank's  results of operations  are
primarily  dependent on net interest  margin,  which is the  difference  between
interest   income  on   interest-earning   assets   and   interest   expense  on
interest-bearing liabilities. The Bank's income is also affected by the level of
its  noninterest  expenses,  such as employee  salaries and benefits,  occupancy
expenses and other  expenses.  The  following  discussion  reviews the financial
condition at September  30, 2002,  and the results of  operations  for the three
months ended September 30, 2002 and 2001.

      The  discussion  set forth below,  as well as other  portions of this Form
10-Q,  may contain  forward-looking  comments.  Such comments are based upon the
information  currently  available to management of the Company and  management's
perception  thereof  as of the  date of the Form  10-Q.  Actual  results  of the
Company's   operations  could  materially  differ  from  those   forward-looking
comments.  The differences could be caused by a number of factors or combination
of  factors  including,  but not  limited  to:  changes  in demand  for  banking
services;  changes in portfolio  composition;  changes in  management  strategy;
increased competition from both bank and non-bank companies;  and changes in the
general level of interest rates.


                                       9
<PAGE>

Financial Condition

      The Company's total assets increased $497,973 from $376,939,544 as of June
30, 2002, to $377,437,517 as of September 30, 2002.

      Interest-bearing   deposits  in  other  financial  institutions  decreased
$848,812  (6%)  from  $13,711,923  as of June 30,  2002,  to  $12,863,111  as of
September 30, 2002, as the funds were used to fund new loans.

      Securities  available-for-sale decreased $673,716 (4%) from $16,463,460 as
of June 30, 2002, to $15,789,744 as of September 30, 2002. The Bank continues to
hold 82,000 shares of Federal Home Loan  Mortgage  Corporation  ("FHLMC")  stock
with an  amortized  cost of $80,294 in the  available-for-sale  category.  As of
September 30, 2002, the gross  unrealized  gain on the stock was  $4,496,126,  a
decrease from $5,044,706 as of June 30, 2002.

      Securities  held-to-maturity  decreased  due to principal  repayments,  by
$264,693 (8%) from $3,219,091 as of June 30, 2002, to $2,954,398 as of September
30, 2002.

      Net loans receivable  increased by $1,524,871 from $316,785,118 as of June
30, 2002, to $318,309,989 as of September 30, 2002.  During this period the Bank
continued its increased emphasis on commercial lending. As a result,  commercial
loans have increased by $2,913,688  during this period.  In addition the Bank is
selling  conforming  loans on single  family  residences,  while  retaining  the
servicing rights. As a result permanent mortgage loans secured by both owner and
non-owner  occupied  residential real estate decreased by $1,791,178 while loans
held for sale  increased  by  $1,999,576.  The Bank  continued  to be  active in
construction  lending.  As a result  construction  loans increased by $5,401,529
during the period. Loan growth is anticipated to continue and represents a major
part of the Bank's planned asset growth.

      Allowance for loan losses decreased $16,233 from $2,649,872 as of June 30,
2002 to $2,633,639 as of September 30, 2002. The allowance  decreased due to net
loan  charge-offs  exceeding the  provision for loan losses for the period.  The
allowance  for loan losses as of September  30, 2002 and June 30, 2002 was 0.81%
and 0.83%, respectively, of net loans outstanding. As of September 30, 2002, the
allowance for loan losses was 858% of impaired  loans versus 151% as of June 30,
2002.

      Premises and equipment decreased $138,280 (2%) from $7,356,098, as of June
30,  2002  to  $7,217,818  as of  September  30,  2002,  primarily  due  to  the
depreciation recognized on these assets.

      Deposits  decreased  $962,547  from  $223,652,319  as of June 30, 2002, to
$222,689,772  as of September 30, 2002. For the three months ended September 30,
2002,   checking  and  savings  accounts  increased  by  $4,563,088  (5%)  while
certificates of deposits decreased by $5,525,635 (4%).

      Federal  Home  Loan  Bank   advances   increased  by  $829,784  (1%)  from
$111,083,163 as of June 30, 2002, to $111,912,947 as of September 30, 2002.

      Advances from borrowers for taxes and insurance  increased  $343,301 (33%)
from $1,048,297 of June 30, 2002, to $1,391,698 as of September 30, 2002.

      Stockholders'  equity  (including  unrealized  appreciation  on securities
available-for-sale,  net of tax) increased  $279,615 (1%) from $35,434,877 as of
June 30, 2002, to $35,714,492 as of September 30, 2002. This increase was due to
several  factors.  During this period the Company net income was $896,046  which
was  partially  offset by dividends in the amount of $417,197  ($0.15 per share)
which were declared prior to September 30, 2002 and paid on October 18, 2002, to
stockholders'  of record as of  October 4,  2002.  There was a  decrease  in the
unrealized  appreciation  on  available-for-sale   securities  of  $358,883.  In
addition,  the Company  repurchased  3,215 shares of treasury stock at a cost of
$45,535 (an average cost of $14.16 per share).  As of September 30, 2002, 28,494
shares remain to be repurchased  under the repurchase plan announced  January 5,
2001. On a per share basis,  stockholders'  equity  increased  from $12.69 as of
June 30, 2002 to $12.76 as of September 30, 2002.


                                       10
<PAGE>

Average Balances, Interest and Average Yields

      The  Company's  profitability  is  primarily  dependent  upon net interest
income,  which  represents  the difference  between  interest and fees earned on
loans and debt and equity  securities,  and the cost of deposits and borrowings.
Net interest income is dependent on the difference  between the average balances
and rates earned on  interest-earning  assets and the average balances and rates
paid on interest-bearing liabilities. Non-interest income, non-interest expense,
and income taxes also impact net income.

      The  following  table  sets  forth  certain  information  relating  to the
Company's average  consolidated  statements of financial  condition and reflects
the average  yield on assets and  average  cost of  liabilities  for the periods
indicated.  Such  yields  and costs are  derived by  dividing  income or expense
annualized by the average  balance of assets or liabilities,  respectively,  for
the periods shown.  Average  balances were derived from average daily  balances.
The  average   balance  of  loans  includes  loans  on  which  the  Company  has
discontinued  accruing  interest.  The yields and costs  include  fees which are
considered adjustments to yields. All dollar amounts are in thousands.


                                       11
<PAGE>

<TABLE>
<CAPTION>
                                                        Three Months ended 9/30/2002         Three Months ended 9/30/2001
                                                        ----------------------------         ----------------------------
                                                   Average                     Yield /     Average                     Yield /
                                                   Balance       Interest       Cost       Balance       Interest       Cost
                                                   --------      --------      ------      --------      --------      ------
<S>                                                <C>           <C>            <C>        <C>           <C>            <C>
ASSETS
Interest-earning:
Loans                                              $322,643         5,488       6.80%      $324,298         6,360       7.84%
Investment securities                                12,404           126       4.06%        15,535           194       5.00%
Other assets                                         25,460           132       2.07%        23,357           187       3.20%
                                                   --------      --------       ----       --------      --------       ----
Total interest-earning                              360,507         5,746       6.38%       363,190         6,741       7.42%
                                                                 --------       ----                     --------       ----
Noninterest-earning                                  14,224                                  13,084
                                                   --------                                --------
                                                   $374,731                                $376,274
                                                   ========                                ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing:
Savings accounts                                   $ 17,685            74       1.67%      $  7,428            38       2.05%
Transaction accounts                                 65,621           244       1.49%        46,438           268       2.31%
Certificates of deposit                             128,318         1,298       4.05%       113,852         1,502       5.28%
FHLB Advances                                       109,350         1,501       5.49%       143,146         2,133       5.96%
Other borrowed funds                                  1,014             3       1.18%         1,868            12       2.57%
                                                   --------      --------       ----       --------      --------       ----
Total interest-bearing                              321,988         3,120       3.88%       312,732         3,953       5.06%
                                                                 --------       ----                     --------       ----
Noninterest-bearing                                  16,455                                  12,617
                                                   --------                                --------
Total liabilities                                   338,443                                 325,349
Stockholders' equity                                 36,288                                  50,925
                                                   --------                                --------
                                                   $374,731                                $376,274
                                                   ========                                ========
Net earning balance                                $ 38,519                                $ 50,458
                                                   ========                                ========
Earning yield less costing rate                                                 2.50%                                   2.36%
                                                                                ====                                    ====
Net interest income, and net yield spread
on interest earning assets                                       $  2,626       2.91%                    $  2,788       3.07%
                                                                 ========       ====                     ========       ====
Ratio of interest-earning assets to
     interest-bearing liabilities                                     112%                                    116%
                                                                 ========                                ========
</TABLE>

Results of Operations - Comparison  of Three Month  Periods Ended  September 30,
2002 and 2001

      Income for the three months ended  September 30, 2002 was $896,046  ($0.32
per share) as compared to $969,080, ($0.25 per share) for the three months ended
September 30, 2001,  which  represents a decrease in earnings of $73,034 for the
three month period  ended  September  30,  2002,  compared to the same period in
2001.

Interest Income

      Total  interest  income for the three  months  ended  September  30, 2002,
decreased  $995,020  (15%) as compared to the three months ended  September  30,
2001.  For the three month period ended  September 30, 2002 compared to the same
period in 2001, the average yield on interest earning assets decreased 104 basis
points to 6.38%, while the average balance of interest earnings assets decreased
$2,683,000.


                                       12
<PAGE>

Interest Expense

      Total  interest  expense for the three  months ended  September  30, 2002,
decreased  $832,669 (21%) when compared to the three months ended  September 30,
2001.  For the three month period ended  September 30, 2002, the average cost of
interest  bearing  liabilities  decreased  118 basis  points to 3.88%  while the
average balance increased $9,256,000 when compared to the same period in 2001.

Net Interest Income

      Net  interest  income  for the three  months  ended  September  30,  2002,
decreased  $162,351 (6%) when  compared to the same period in 2001.  The average
balance of interest  bearing  liabilities  increased  $11,939,000  more than the
average  balance in interest  earning  assets.  For the three month period ended
September 30, 2002, the earning yield minus the costing rate spread increased 14
basis points to 2.50% compared to the same period in 2001.

Provision for Loan Losses

      Based primarily on the continued growth of the loan portfolio,  management
decided to increase the allowance  for loan losses  through a provision for loan
loss of $100,000 for the three months ended  September 30, 2002,  and of $75,000
for the same period in 2001. The Bank will continue to monitor its allowance for
loan  losses  and  make  future  additions  based  on  economic  and  regulatory
conditions. Although the Bank maintains its allowance for loan losses at a level
which it considers to be sufficient to provide for potential  losses,  there can
be no  assurance  that future  losses  will not exceed  internal  estimates.  In
addition,  the amount of the  allowance  for loan losses is subject to review by
regulatory  agencies  which can  order  the  establishment  of  additional  loss
provisions.

Noninterest Income

      Noninterest  income  increased  $73,716  (9%) for the three  months  ended
September 30, 2002,  when compared to the three months ended September 30, 2001.
These increases were primarily due to checking  service charges of $87,555 (25%)
and late charges and  prepayment  penalties on loans of $127,833  (441%).  These
increases  were  partially  offset by a decrease of  $117,921  (34%) on sales of
loans and  investments.  During the three month period ended  September 30, 2002
there was a profit on sale of loans of  $224,577.  During this same period there
were no sales of investments.  During the three month period ended September 30,
2001  there  was a profit on sale of loans of  $180,785  and a profit on sale of
investments of $161,713.  The profit on sale of investments  was due the sale of
various equity securities including 2,000 shares of FHLMC stock.

Noninterest Expense

      Noninterest  expense  increased  $19,938  (1%) for the three  months ended
September 30, 2002,  when compared to the three months ended September 30, 2001.
This small  increase can be attributed to the Company's  aggressive  approach to
controlling expenses.  There was no significant change in any individual expense
category.

Provision for Income Taxes

      The  provision  for income  taxes  decreased  $60,539  (11%) for the three
months ended  September 30, 2002,  as compared to the same period in 2001.  This
decrease was due to the decrease in before tax income for the three months ended
September 30, 2002, compared to the same period in 2001.

Nonperforming Assets

      The allowance  for loan losses is  calculated  based upon an evaluation of
pertinent  factors  underlying  the  various  types and  quality  of the  loans.
Management  considers  such  factors  as the  repayment  status  of a loan,  the
estimated net  realizable  value of the  underlying  collateral,  the borrower's
intent and ability to repay the loan,  local economic  conditions and the Bank's
historical loss ratios. The Bank's allowance for loan losses as of September 30,


                                       13
<PAGE>

2002, was $2,633,639 or 0.81% of loans  receivable.  Total assets  classified as
substandard  or loss as of September  30, 2002,  were  $296,304 or 0.1% of total
assets.  Management has considered  nonperforming and total classified assets in
evaluating the adequacy of the Bank's allowance for loan losses.

      The ratio of  nonperforming  assets to total assets is another useful tool
in evaluating exposure to credit risk.  Nonperforming assets of the Bank include
nonperforming loans (nonaccruing loans) and assets which have been acquired as a
result of foreclosure or deed-in-lieu of foreclosure.  All dollar amounts are in
thousands.

<TABLE>
<CAPTION>
                                                                          9/30/02           6/30/02           6/30/01
                                                                          ------            ------            ------
<S>                                                                       <C>                <C>               <C>
Nonperforming loans                                                       $  407             1,751             4,948
Real estate acquired in settlement of loans                                  110               683                 4
                                                                          ------            ------            ------
Total nonperforming assets                                                $  517             2,434             4,952
                                                                          ======            ======            ======

Total nonperforming assets as a percentage of total assets                  0.14%             0.65%             1.32%
Allowance for loan losses                                                 $2,634             2,650             2,697
Allowance for loan losses as a percentage of average net loans              0.82%             0.82%             0.87%

</TABLE>

Impact of Recent Accounting Pronouncements

      The Financial Accounting Standards Board (FASB) recently adopted Statement
of  Financial  Accounting  Standards  No. 142 (SFAS  142),  "Goodwill  and Other
Intangible  Assets".  This Statement  establishes  new financial  accounting and
reporting  standards  for acquired  goodwill and other  intangible  assets.  The
Statement addresses how intangible assets that are acquired individually or with
a group of other  assets  (but not those  acquired  in a  business  combination)
should be accounted for in financial statements upon their acquisition.  It also
addresses how goodwill and other intangible assets should be accounted for after
they have been  initially  recognized in the financial  statements.  SFAS 142 is
effective for fiscal years  beginning  after  December 15, 2001. The Company has
adopted SFAS 142 in the quarter ending September 30, 2002.  Adoption of SFAS 142
as of that date had no effect on the Company's financial statements.

      The FASB recently  adopted SFAS 147,  "Acquisitions  of Certain  Financial
Institutions."  This statement  removes  acquisitions of financial  institutions
from the scope of SFAS 72,  "Accounting  for Certain  Acquisitions of Banking or
Thrift  Institutions"  if those  acquisitions  meet the definition of a business
combination.  Financial institutions meeting certain conditions in SFAS 147 will
be  required  to  cease  amortizing   certain   intangible  assets  acquired  in
transactions  previously  accounted  for under  SFAS 72 and  restate  previously
issued  interim  financial  information.  The  provisions  of the  Statement are
effective on October 1, 2002.  Management  believes initial adoption of SFAS 147
will have no material effect on the Company's financial statements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Asset/Liability Management

      The goal of the Bank's  asset/liability  policy is to manage interest rate
risk so as to maximize net interest  income over time in changing  interest rate
environments.   Management   monitors  the  Bank's  net  interest  spreads  (the
difference  between  yields  received  on assets and paid on  liabilities)  and,
although  constrained by market  conditions,  economic  conditions,  and prudent
underwriting standards, the Bank offers deposit rates and loan rates designed to
maximize net interest income. Management also attempts to fund the Bank's assets
with  liabilities  of a  comparable  duration to minimize the impact of changing
interest  rates on the Bank's net interest  income.  Since the  relative  spread
between  financial  assets and  liabilities is constantly  changing,  the Bank's
current net  interest  income may not be an  indication  of future net  interest
income.


                                       14
<PAGE>

      As a part  of  its  asset  and  liability  management  strategy  the  Bank
implemented an adjustable  rate mortgage loan ("ARM")  program  beginning in the
early  1980s.  Throughout  the past  several  years,  the Bank has  continued to
emphasize the origination of  adjustable-rate,  one- to four-family  residential
loans and  adjustable-rate  or  relatively  short-term  commercial  real estate,
commercial  business and consumer loans, while originating  fixed-rate,  one- to
four-family  residential  loans primarily for immediate  resale in the secondary
market on a service-retained basis. This allows the Bank to serve the customer's
needs and retain a banking relationship without the risk of carrying a long-term
fixed-rate loan on the books.

      The  Bank is also  managing  interest  rate  risk  by the  origination  of
construction  loans.  As of September 30, 2002,  such loans made up 17.3% of the
net loans  receivable.  In  general,  these loans have  higher  yields,  shorter
maturities and greater interest rate sensitivity than other real estate loans.

      The Bank  constantly  monitors its deposits in an effort to decrease their
interest  rate  sensitivity.  Rates of interest paid on deposits at the Bank are
priced  competitively  in order to meet the  Bank's  asset/liability  management
objectives  and spread  requirements.  As of June 30, 2002,  the Bank's  savings
accounts,   checking  accounts,   and  money  market  deposit  accounts  totaled
$92,070,160  or 41% of its total  deposits.  As of  September  30,  2002,  these
accounts totaled $96,633,248 or 43% of total deposits. The Bank believes,  based
on historical experience, that a substantial portion of such accounts represents
non-interest rate sensitive, core deposits.

Interest Rate Sensitivity Analysis

      The  following  table  sets  forth as of June 30,  2002 (the  most  recent
available),  the OTS estimate of the projected  changes in net  portfolio  value
("NPV") in the event of 100, 200, and 300 basis point ("bp")  instantaneous  and
permanent  increases and a 100 basis point  instantaneous and permanent decrease
in market interest rates. Dollar amounts are expressed in thousands.

<TABLE>
<CAPTION>
                     Estimated Net Portfolio Value             NPV as % of PV of Assets
BP Change     --------------------------------------------     ------------------------
in Rates      $ Amount        $ Change            % Change     NPV Ratio        Change
---------     --------        --------            --------     ---------        ------
<S>            <C>             <C>                   <C>         <C>             <C>
  +300         $39,398         $  (111)               0%         10.58%          0.33%
  +200          40,059             550                1%         10.62%          0.37%
  +100          40,098             589                1%         10.51%          0.26%
    NC          39,509              --               --          10.25%            --
  -100          37,785          (1,724)              -4%          9.74%         -0.51%
</TABLE>

      Computations of prospective effects of hypothetical  interest rate changes
are  calculated  by the OTS from  data  provided  by the  Bank and are  based on
numerous  assumptions,  including relative levels of market interest rates, loan
repayments and deposit run-offs,  and should not be relied upon as indicative of
actual  results.  Further,  the  computations do not contemplate any actions the
Bank may undertake in response to changes in interest rates.

      Management  cannot  predict  future  interest rates or their effect on the
Bank's NPV in the future.  Certain  shortcomings  are  inherent in the method of
analysis  presented in the  computation  of NPV. For example,  although  certain
assets and liabilities may have similar maturities or periods to repricing, they
may  react  in  differing   degrees  to  changes  in  market   interest   rates.
Additionally, certain assets, such as adjustable rate loans, which represent the
Bank's  primary loan product,  have an initial fixed rate period  typically from
one to five  years  and over the  remaining  life of the  asset  changes  in the
interest rate are  restricted.  In addition,  the proportion of adjustable  rate
loans  in  the  Bank's  portfolio  could  decrease  in  future  periods  due  to
refinancing  activity  if market  interest  rates  remain  steady in the future.
Further,  in the  event of a change  in  interest  rates,  prepayment  and early
withdrawal levels could deviate  significantly  from those assumed in the table.
Finally, the ability of many borrowers to service their adjustable-rate debt may
decrease in the event of an interest rate increase.

      The Bank's Board of Directors is  responsible  for reviewing the asset and
liability  policies.  The Board meets quarterly to review interest rate risk and
trends,  as well as liquidity and capital  ratios and  requirements.  The


                                       15
<PAGE>

Bank's   management  is   responsible   for   administering   the  policies  and
determinations  of the Board of  Directors  with respect to the Bank's asset and
liability goals and strategies.

Liquidity and Capital Resources

      The Bank's primary  sources of funds are deposits,  principal and interest
payments on loans and  securities and extensions of credit from the Federal Home
Loan Bank of Des Moines.  While  scheduled loan and security  repayments and the
maturity of short-term  investments are somewhat predictable sources of funding,
deposit  flows are  influenced  by many  factors,  which  make  their cash flows
difficult to anticipate.

      The Bank uses its liquidity  resources  principally to satisfy its ongoing
commitments   which  include   funding  loan   commitments,   funding   maturing
certificates of deposit as well as deposit withdrawals,  maintaining  liquidity,
purchasing  investments,  and meeting  operating  expenses.  As of September 30,
2002, the Bank had approximately $4,620,000 in commitments to originate mortgage
loans and $21,924,000 in  loans-in-process  on mortgage loans. These commitments
will be funded through existing cash balances, cash flow from operations and, if
required,  FHLB advances . Management  believes that  anticipated cash flows and
deposit growth will be adequate to meet the Bank's liquidity needs.

Item 4. Controls and Procedures

(a) The Company maintains  disclosure  controls and procedures that are designed
to ensure that  information  required to be disclosed in the Company's  Exchange
Act reports is recorded,  processed,  summarized  and  reported  within the time
periods  specified in the SEC's rules and forms,  and that such  information  is
accumulated and  communicated to the Company's  management,  including its Chief
Executive Officer and Chief Financial Officer,  as appropriate,  to allow timely
decisions  regarding  required  disclosure  based  closely on the  definition of
"disclosure controls and procedures" in Rule 13a-14(c).

Within 90 days prior to the date of this  report,  the  Company  carried  out an
evaluation,  under the supervision and with the  participation  of the Company's
management,  including the Company's Chief  Executive  Officer and the Company's
Chief Financial Officer, of the effectiveness of the design and operation of the
Company's  disclosure  controls  and  procedures.  Based on the  foregoing,  the
Company's Chief Executive Officer and Chief Financial Officer concluded that the
Company's disclosure controls and procedures were effective.

(b) There have been no significant changes in the Company's internal controls or
in  other  factors  that  could  significantly   affect  the  internal  controls
subsequent to the date the Company completed its evaluation.


                                       16
<PAGE>

                                     PART II

Item 1. Legal Proceedings
        None.

Item 2. Changes in Securities
        Not applicable.

Item 3. Defaults Upon Senior Securities
        Not applicable.

Item 4. Submission of Matters to Vote of Common Stockholders

      The annual meeting of  stockholders  of the registrant was held on October
23, 2002. At the meeting the  stockholders  elected Wayne V. Barnes,  Gregory V.
Ostergren and James L. Sivils, III to three-year terms and Don M. Gibson and Tim
Rosenbury to two-year  terms as directors of the Company,  while Gary  Lipscomb,
Jack L. Barham and Kurt  Hellweg  continue to serve as  directors.  Also at that
meeting,  BKD, LLP was ratified as  Independent  Certified  Public  Accountants.
These same entities serve in identical capacities for the subsidiary bank of the
registrant.

The results of voting are shown for each matter considered.

Director election:

Nominee                             Votes For                Votes Withheld
-------                             ---------                --------------

Wayne V. Barnes                     2,494,470                    51,770

Gregory V. Ostergren                2,596,964                    49,285

James L. Sivils, III                2,495,971                    50,269

Don M. Gibson                       2,494,593                    51,647

Tim Rosenbury                       2,496,875                    49,365

Auditor ratification:

Votes for                           2,525,371

Votes against                           8,076

Abstentions                            12,793

Item 5. Other Information
        None.

Item 6. Exhibits and Reports on Form 8-K

        a) List of Exhibits

            99.1  CEO   certification   pursuant   to   Section   906   of   the
                  Sarbanes-Oxley Act of 2002

            99.2  CFO   certification   pursuant   to   Section   906   of   the
                  Sarbanes-Oxley Act of 2002

        b) Reports on Form 8-K None.


                                       17
<PAGE>

                                   SIGNATURES

      In accordance  with the  requirements  of the  Securities  Exchange Act of
1934,  the  registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

      Guaranty Federal Bancshares, Inc.

      Signature and Title                                      Date

      /s/ Don M. Gibson                                        November 12, 2002
      -------------------------------------------------        -----------------
      Don M. Gibson
      President and Chief Executive Officer
      (Principal Executive Officer)

      /s/ Bruce Winston                                        November 12, 2002
      -------------------------------------------------        -----------------
      Bruce Winston
      Senior Vice President and Chief Financial Officer
      (Principal Financial and Accounting Officer)


                                       18
<PAGE>

                Certification of the Principal Executive Officer
                 (Section 302 of the Sarbanes-Oxley Act of 2002)

      I, Don M. Gibson, certify that:

1. I have  reviewed  this  quarterly  report  on Form 10-Q of  Guaranty  Federal
Bancshares, Inc.;

2. Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

      a)  designed  such  disclosure  controls  and  procedures  to ensure  that
      material   information   relating  to  the   registrant,   including   its
      consolidated  subsidiaries,  is made  known to us by others  within  those
      entities, particularly during the period in which this quarterly report is
      being prepared;

      b) evaluated the effectiveness of the registrant's disclosure controls and
      procedures  as of a date  within 90 days prior to the filing  date of this
      quarterly report (the "Evaluation Date"); and

      c)  presented  in  this  quarterly   report  our  conclusions   about  the
      effectiveness  of the  disclosure  controls  and  procedures  based on our
      evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

      a) all  significant  deficiencies  in the design or  operation of internal
      controls which could adversely affect the registrant's  ability to record,
      process,  summarize and report  financial data and have identified for the
      registrant's auditors any material weaknesses in internal controls; and

      b) any fraud,  whether or not material,  that involves management or other
      employees  who  have  a  significant  role  in the  registrant's  internal
      controls; and

6. The  registrant's  other  certifying  officers  and I have  indicated in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: November 13, 2002
                                           /s/ Don M. Gibson
                                           -----------------
                                           Don M. Gibson
                                           President and Chief Executive Officer
                                           (Principal Executive Officer)


                                       19
<PAGE>

                Certification of the Principal Financial Officer
                 (Section 302 of the Sarbanes-Oxley Act of 2002)

      I, Bruce Winston, certify that:

1. I have  reviewed  this  quarterly  report  on Form 10-Q of  Guaranty  Federal
Bancshares, Inc.;

2. Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

      a)  designed  such  disclosure  controls  and  procedures  to ensure  that
      material   information   relating  to  the   registrant,   including   its
      consolidated  subsidiaries,  is made  known to us by others  within  those
      entities, particularly during the period in which this quarterly report is
      being prepared;

      b) evaluated the effectiveness of the registrant's disclosure controls and
      procedures  as of a date  within 90 days prior to the filing  date of this
      quarterly report (the "Evaluation Date"); and

      c)  presented  in  this  quarterly   report  our  conclusions   about  the
      effectiveness  of the  disclosure  controls  and  procedures  based on our
      evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

      a) all  significant  deficiencies  in the design or  operation of internal
      controls which could adversely affect the registrant's  ability to record,
      process,  summarize and report  financial data and have identified for the
      registrant's auditors any material weaknesses in internal controls; and

      b) any fraud,  whether or not material,  that involves management or other
      employees  who  have  a  significant  role  in the  registrant's  internal
      controls; and

6. The  registrant's  other  certifying  officers  and I have  indicated in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: November 13, 2002
                                                   /s/ Bruce Winston
                                                   -----------------
                                                   Bruce Winston
                                                   Chief Financial Officer
                                                   (Principal Financial Officer)


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