Great Southern invests in Guaranty Federal

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As a result of a Feb. 26 order of approval issued by the Federal Reserve Board, Great Southern Bancorp Inc., the holding company of Great Southern Bank, has the capability to own up to 20 percent of the voting shares of Guaranty Federal Bancshares Inc., which is the holding company for Guaranty Federal Savings Bank.|ret||ret||tab|

Guaranty Federal Bank President Jim Haseltine said Great Southern already had the option to purchase as much as 15 percent of Guaranty Federal's stock. According to the order from the Federal Reserve Board, Guaranty Federal objected to the increase in percentage ownership interest, a fact that Haseltine confirms.|ret||ret||tab|

"It goes against our charter. Our charter says no owner can own 10 percent of the stock during the first five years," from the date that the company became a fully public company, in late 1997, he said.|ret||ret||tab|

But Haseltine noted that the change doesn't affect Guaranty Federal's operations.|ret||ret||tab|

Great Southern has "agreed not to try to influence our management or place anybody on our board (of directors), so we're just going to continue to operate as we have," Haseltine added. |ret||ret||tab|

Joseph Turner, president of Great Southern Bank, said Great Southern's move to gain approval from the Federal Reserve Board for an increased ownership interest in Guaranty Federal is related to Guaranty Federal's latest stock buyback plan, which Haseltine said was initiated in January.|bold_on||bold_on||ret||ret||tab|

"As a result of their buyback plan, it's possible that our percentage of ownership could increase, and that's why we had to get the approval of the Federal Reserve," Turner said.|ret||ret||tab|

Haseltine noted that Guaranty Federal does have in place a shareholder rights plan that would prevent takeovers of the bank by any of its shareholders, including Great Southern.|ret||ret||tab|

"Some people call it a poison pill, but what it (does) is it requires them to sit down at the table with us. In other words, they can't come in and ride roughshod without sitting down and talking to us," Haseltine said. He added that the shareholder rights plan authorizes individual shareholders to buy up to 15 percent of Guaranty Federal's outstanding shares, and if someone goes over that limit, the shareholder rights plan's anti-takeover measures are activated.|ret||ret||tab|

"The way the shareholder rights plan works is that every shareholder except the one owning over 15 percent would have the right to buy additional shares at a discount," Haseltine said.|ret||ret||tab|

"It basically forces them to sit down and talk with us if they have designs on taking us over. They can't just go out and buy all the stock because the shareholder right plan, if it's put into effect, would dilute their holdings significantly."|ret||ret||tab|

Haseltine said he hasn't had any contact from Great Southern since the order was approved, and he doesn't think a takeover is what Great Southern has in mind.|ret||ret||tab|

"My thought is that they look at us as a good investment," Haseltine said. He noted that Great Southern actually already owns more than 15 percent of Guaranty Federal's outstanding shares, but the shareholder rights plan hasn't been activated. Haseltine said that's because Great Southern's increased holdings above the 15 percent limit are related to the present and previous stock repurchasing plans of Guaranty Federal|bold_on|. |ret||ret||tab|

"Since Great Southern is already in excess of 15 percent due to our repurchases, all they would need to do to effect that shareholder rights plan is buy one share, but it has to be an active thing on their part," Haseltine said.|ret||ret||tab|

Turner said Great Southern has no intention of taking over Guaranty Federal.|ret||ret||tab|

"We're strictly interested as a passive investor ... we've made commitments to the Federal Reserve to remain a passive investor," Turner said. He added that because Guaranty Federal does have its poison pill' in place, Great Southern won't be purchasing any additional stock. |ret||ret||tab|

Guaranty Federal has four locations in Springfield and one in Nixa at the Wal-Mart Supercenter. Great Southern has nine Springfield-area branches.|ret||ret||tab|

Turner said Great Southern is focused on continued asset growth. "In the year 2000, our assets increased to over $150 million, so I think we'll continue to grow, maybe not at that pace, but certainly at a very healthy pace," Turner said. |ret||ret||tab|

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