Guaranty Bank approved for $17M in Treasury funds

Springfield-based Guaranty Federal Bancshares Inc. has received preliminary approval to sell $17 million in preferred stock and related warrants to the U.S. Treasury through the government's Capital Purchase Program.

Guaranty Bank remains "well-capitalized" by all regulatory standards, the bank said in a news release, but the investment would enhance its capital position.

"After careful consideration, we have concluded that the additional capital available through the program would increase our ability to provide appropriate lending to consumers and businesses and would enhance the company's financial flexibility," Guaranty CEO and President Shaun Burke said in the release.

Guaranty Bank will issue preferred stock to the Treasury with a dividend rate of 5 percent annually for five years and 9 percent beyond that. The Treasury also will receive 10-year warrants allowing it to purchase Guaranty Bank common stock with an aggregate value equal to 15 percent of the preferred stock issued.

Springfield-based Great Southern Bank also has participated in the Capital Purchase Program, which is aimed at recapitalizing financial institutions to increase the flow of financing. It is one component of the $700 billion federal bailout plan known as the Troubled Asset Relief Program.