10-Q

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 quarterly period ended June 30, 2014

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	(IRS 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

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 whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [  ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. Yes [  ] No [X]

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding as of August 1, 2014
Common Stock, Par Value $0.10 per share	4,274,348 Shares

GUARANTY FEDERAL BANCSHARES, INC.

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Financial Statements (Unaudited):
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Income	4
	Condensed Consolidated Statements of Comprehensive Income	5
	Condensed Consolidated Statements of Stockholders’ Equity	6
	Condensed Consolidated Statements of Cash Flows	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		31
Item 3. Quantitative and Qualitative Disclosures about Market Risk		37
Item 4. Controls and Procedures		39
PART II. OTHER INFORMATION
Item 1. Legal Proceedings		40
Item 1A. Risk factors		40
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		40
Item 3. Defaults Upon Senior Securities		40
Item 4. Mine Safety Disclosures		40
Item 5. Other Information		40
Item 6. Exhibits		40
Signatures

2

PART I FINANCIAL INFORMATION

Item 1. Financial Statements

GUARANTY FEDERAL BANCSHARES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

JUNE 30, 2014 (UNAUDITED) AND DECEMBER 31, 2013

	6/30/14			12/31/13
ASSETS
Cash	$	4,449,140		$	3,453,032
Interest-bearing deposits in other financial institutions		16,381,886			8,850,168
Cash and cash equivalents		20,831,026			12,303,200
Available-for-sale securities		100,414,541			97,692,685
Held-to-maturity securities		69,862			79,162
Stock in Federal Home Loan Bank, at cost		2,878,900			2,885,100
Mortgage loans held for sale		1,221,633			623,432
Loans receivable, net of allowance for loan losses of June 30, 2014 - $6,788,409 - December 31, 2013 - $7,801,600		454,151,996			464,379,854
Accrued interest receivable:
Loans		1,474,218			1,462,881
Investments and interest-bearing deposits		365,020			389,760
Prepaid expenses and other assets		5,033,213			5,536,879
Foreclosed assets held for sale		3,644,396			3,821,976
Premises and equipment, net		10,733,726			10,886,720
Bank owned life insurance		14,228,666			14,043,697
Income taxes receivable		615,777			504,138
Deferred income taxes		4,090,202			5,278,651
	$	619,753,176		$	619,888,135
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits	$	481,152,569		$	487,318,939
Federal Home Loan Bank and Federal Reserve Bank advances		53,400,000			55,350,000
Securities sold under agreements to repurchase		10,000,000			10,000,000
Subordinated debentures		15,465,000			15,465,000
Advances from borrowers for taxes and insurance		345,262			149,668
Accrued expenses and other liabilities		1,047,288			998,934
Accrued interest payable		239,297			250,361
		561,649,416			569,532,902
COMMITMENTS AND CONTINGENCIES		-			-
STOCKHOLDERS' EQUITY
Capital Stock:
Series A preferred stock, $0.01 par value; authorized 2,000,000 shares; issued and outstanding December 31, 2013 - 12,000 shares		-			11,983,790
Common stock, $0.10 par value; authorized 10,000,000 shares; issued June 30, 2014 and December 31, 2013 - 6,799,903 and 6,783,603 shares, respectively		679,990			678,360
Additional paid-in capital		50,672,475			57,655,031
Retained earnings, substantially restricted		45,840,055			43,769,485
Accumulated other comprehensive income (loss)
Unrealized gain (loss) on available-for-sale securities, net of income taxes		(916,796	)		(2,506,248	)
		96,275,724			111,580,418
Treasury stock, at cost; June 30, 2014 and December 31, 2013 - 2,525,555 and 4,051,248 shares, respectively		(38,171,964	)		(61,225,185	)
		58,103,760			50,355,233
	$	619,753,176		$	619,888,135

See Notes to Condensed Consolidated Financial Statements

3

GUARANTY FEDERAL BANCSHARES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2014 AND 2013 (UNAUDITED)

	Three months ended						Six months ended
	6/30/2014			6/30/2013			6/30/2014			6/30/2013
Interest Income
Loans	$	5,576,155		$	5,952,456		$	11,443,713		$	11,880,846
Investment securities		415,318			466,828			872,884			899,457
Other		46,110			47,736			81,050			106,138
		6,037,583			6,467,020			12,397,647			12,886,441
Interest Expense
Deposits		562,700			731,420			1,169,493			1,492,594
Federal Home Loan Bank and Federal Reserve Bank advances		298,636			307,869			594,327			676,544
Subordinated debentures		133,035			134,322			266,198			268,672
Other		65,975			107,742			131,225			271,697
		1,060,346			1,281,353			2,161,243			2,709,507
Net Interest Income		4,977,237			5,185,667			10,236,404			10,176,934
Provision for Loan Losses		325,000			250,000			525,000			650,000
Net Interest Income After
Provision for Loan Losses		4,652,237			4,935,667			9,711,404			9,526,934
Noninterest Income
Service charges		318,434			292,049			631,419			553,834
Gain on sale of investment securities		7,603			116,182			10,691			204,983
Gain on sale of loans		250,667			592,086			436,245			1,024,019
Gain on sale of state low-income housing tax credits		-			1,441,012			-			1,441,012
Net loss on foreclosed assets		(61,182	)		(75,758	)		(76,965	)		(148,103	)
Other income		346,973			318,973			678,798			628,567
		862,495			2,684,544			1,680,188			3,704,312
Noninterest Expense
Salaries and employee benefits		2,231,963			2,272,746			4,536,731			4,665,108
Occupancy		419,614			449,764			846,675			875,893
FDIC deposit insurance premiums		120,029			141,173			256,963			283,636
Prepayment penalty on securities sold under agreements to repurchase		-			1,510,000			-			1,510,000
Data processing		165,486			184,875			326,272			354,135
Advertising		106,251			106,251			212,502			212,502
Other expense		839,640			867,528			2,048,444			2,056,663
		3,882,983			5,532,337			8,227,587			9,957,937
Income Before Income Taxes		1,631,749			2,087,874			3,164,005			3,273,309
Provision for Income Taxes		293,066			520,134			523,896			752,916
Net Income		1,338,683			1,567,740			2,640,109			2,520,393
Preferred Stock Dividends and Discount Accretion		111,000			198,630			357,210			397,260
Net Income Available to Common Shareholders	$	1,227,683		$	1,369,110		$	2,282,899		$	2,123,133
Basic Income Per Common Share	$	0.29		$	0.50		$	0.61		$	0.78
Diluted Income Per Common Share	$	0.28		$	0.49		$	0.60		$	0.76

See Notes to Condensed Consolidated Financial Statements

4

GUARANTY FEDERAL BANCSHARES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2014 AND 2013 (UNAUDITED)

	Three months ended						Six months ended
	6/30/2014			6/30/2013			6/30/2014			6/30/2013
NET INCOME	$	1,338,683		$	1,567,740		$	2,640,109		$	2,520,393
OTHER ITEMS OF COMPREHENSIVE INCOME (LOSS):
Change in unrealized gain (loss) on investment securities available-for-sale, before income taxes		1,248,693			(3,722,649	)		2,533,631			(4,104,800	)
Less: Reclassification adjustment for realized gains on investment securities included in net income, before income taxes		(7,603	)		(116,182	)		(10,691	)		(204,983	)
Total other items in comprehensive income (loss)		1,241,090			(3,838,831	)		2,522,940			(4,309,783	)
Income tax expense (benefit) related to other items of comprehensive income		459,203			(1,420,367	)		933,488			(1,594,619	)
Other comprehensive income (loss)		781,887			(2,418,464	)		1,589,452			(2,715,164	)
TOTAL COMPREHENSIVE INCOME (LOSS)	$	2,120,570		$	(850,724	)	$	4,229,561		$	(194,771	)

See Notes to Condensed Consolidated Financial Statements

5

GUARANTY FEDERAL BANCSHARES, INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

SIX MONTHS ENDED JUNE 30, 2014 (UNAUDITED)

	Preferred Stock			Common Stock		Additional Paid-In Capital			Treasury Stock			Retained Earnings			Accumulated Other Comprehensive Income (loss)			Total
Balance, January 1, 2014	$	11,983,790		$	678,360	$	57,655,031		$	(61,225,185	)	$	43,769,485		$	(2,506,248	)	$	50,355,233
Net income		-			-		-			-			2,640,109			-			2,640,109
Change in unrealized gain (loss) on available-for-sale securities, net of income taxes		-			-		-			-			-			1,589,452			1,589,452
Preferred stock redeemed		(12,000,000	)		-		-			-			-			-			(12,000,000	)
Preferred stock discount accretion		16,210			-		-			-			(16,210	)		-			-
Preferred stock dividends		-			-		-			-			(338,000	)		-			(338,000	)
Dividends on common stock ($0.05 per share)		-			-		-			-			(215,329	)		-			(215,329	)
Stock award plans		-			-		(215,059	)		388,236			-			-			173,177
Stock options exercised		-			1,630		83,176			-			-			-			84,806
Proceeds from issuance of common stock		-			-		(6,850,673	)		22,664,985			-			-			15,814,312
Balance, June 30, 2014	$	-		$	679,990	$	50,672,475		$	(38,171,964	)	$	45,840,055		$	(916,796	)	$	58,103,760

See Notes to Condensed Consolidated Financial Statements

6

GUARANTY FEDERAL BANCSHARES, INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

SIX MONTHS ENDED JUNE 30, 2013 (UNAUDITED)

	Preferred Stock		Common Stock		Common Stock Warrants			Additional Paid-In Capital			Treasury Stock			Retained Earnings			Accumulated Other Comprehensive Income (loss)			Total
Balance, January 1, 2013	$	11,789,276	$	678,180	$	1,377,811		$	58,267,529		$	(61,369,344	)	$	39,324,292		$	800,826		$	50,868,570
Net income		-		-		-			-			-			2,520,393			-			2,520,393
Change in unrealized gain (loss) on available-for-sale securities, net of income taxes		-		-		-			-			-			-			(2,715,164	)		(2,715,164	)
Preferred stock discount accretion		97,257		-		-			-			-			(97,257	)		-			-
Preferred stock dividends		-		-		-			-			-			(300,000	)		-			(300,000	)
Common stock warrants repurchased		-		-		(1,377,811	)		(625,439	)		-			-			-			(2,003,250	)
Stock award plans		-		-		-			(63,520	)		250,795			-			-			187,275
Stock options exercised		-		180		-			9,229			-			-			-			9,409
Treasury stock purchased		-		-		-			-			(105,782	)		-			-			(105,782	)
Balance, June 30, 2013	$	11,886,533	$	678,360	$	-		$	57,587,799		$	(61,224,331	)	$	41,447,428		$	(1,914,338	)	$	48,461,451

See Notes to Condensed Consolidated Financial Statements

7

GUARANTY FEDERAL BANCSHARES, INC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

SIX MONTHS ENDED JUNE 30, 2014 AND 2013 (UNAUDITED)

	6/30/2014			6/30/2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	2,640,109		$	2,520,393
Items not requiring (providing) cash:
Deferred income taxes		254,961			675,633
Depreciation		382,086			414,885
Provision for loan losses		525,000			650,000
Gain on sale of loans and investment securities		(446,936	)		(1,229,002	)
Loss on foreclosed assets held for sale		25,593			76,448
Gain on sale of state low-income housing tax credits		-			(1,441,012	)
Amortization of deferred income, premiums and discounts		313,135			274,385
Stock award plan expense		190,490			187,275
Origination of loans held for sale		(14,709,615	)		(31,553,697	)
Proceeds from sale of loans held for sale		14,547,659			34,000,714
Increase in cash surrender value of bank owned life insurance		(184,969	)		(194,895	)
Changes in:
Prepaid FDIC deposit insurance premiums		-			1,438,636
Accrued interest receivable		13,403			51,533
Prepaid expenses and other assets		503,666			295,071
Accounts payable and accrued expenses		(103,039	)		179,869
Income taxes receivable		(128,952	)		77,283
Net cash provided by operating activities		3,822,591			6,423,519
CASH FLOWS FROM INVESTING ACTIVITIES
Net change in loans		9,451,794			5,081,769
Principal payments on held-to-maturity securities		9,300			91,829
Principal payments on available-for-sale securities		4,235,914			6,345,815
Proceeds from calls/maturities of available-for-sale securities		3,151,000			9,000,000
Purchase of premises and equipment		(229,092	)		(272,671	)
Purchase of available-for-sale securities		(25,995,159	)		(44,309,342	)
Proceeds from sale of available-for-sale securities		18,106,890			17,311,228
Redemption of Federal Home Loan Bank stock		6,200			658,100
Proceeds from sale of state low-income housing tax credits		-			1,441,012
Proceeds from sale of foreclosed assets held for sale		403,046			828,401
Net cash provided by (used in) investing activities		9,139,893			(3,823,859	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in demand deposits, NOW and savings accounts		(4,450,772	)		25,921,950
Net decrease in certificates of deposit		(1,715,598	)		(14,047,207	)
Net decrease of securities sold under agreements to repurchase		-			(15,000,000	)
Proceeds from FHLB advances		1,050,000			-
Repayments of FHLB advances		(3,000,000	)		(15,100,000	)
Stock options exercised		84,806			9,409
Redemption of preferred stock		(12,000,000	)		-
Repurchase of common stock warrants		-			(2,003,250	)
Proceeds from issuance of common stock		15,814,312			-
Advances from borrowers for taxes and insurance		195,594			217,003
Cash dividends paid on preferred stock		(413,000	)		(300,000	)
Treasury stock purchased		-			(105,782	)
Net cash used in financing activities		(4,434,658	)		(20,407,877	)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		8,527,826			(17,808,217	)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		12,303,200			41,663,405
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	20,831,026		$	23,855,188

See Notes to Condensed Consolidated Financial Statements

8

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1: Basis of Presentation

The accompanying unaudited interim condensed 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.

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in Guaranty Federal Bancshares, Inc.’s (the “Company”) Annual Report on Form 10-K for the year ended December 31, 2013 filed with the Securities and Exchange Commission (the “SEC”). The results of operations for the periods are not necessarily indicative of the results to be expected for the full year. The condensed consolidated balance sheet of the Company as of December 31, 2013, 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 condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Guaranty Bank (the “Bank”). All significant intercompany transactions and balances have been eliminated in consolidation.

Note 3: Securities

The amortized cost and approximate fair values of securities classified as available-for-sale were as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Approximate Fair Value
As of June 30, 2014
Equity Securities	$	102,212	$	18,270	$	(14,468	)	$	106,014
Debt Securities:
U. S. government agencies		17,859,155		-		(521,929	)		17,337,226
Municipals		14,390,096		103,051		(210,367	)		14,282,780
Government sponsored mortgage-backed securities		69,518,311		303,267		(1,133,057	)		68,688,521
	$	101,869,774	$	424,588	$	(1,879,821	)	$	100,414,541

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Approximate Fair Value
As of December 31, 2013
Equity Securities	$	102,212	$	16,007	$	(18,913	)	$	99,306
Debt Securities:
U. S. government agencies		33,198,865		-		(1,437,478	)		31,761,387
Municipals		14,133,821		18,827		(660,021	)		13,492,627
Corporates		990,663		3,609		-			994,272
Government sponsored mortgage-backed securities		53,245,297		265,038		(2,165,242	)		51,345,093
	$	101,670,858	$	303,481	$	(4,281,654	)	$	97,692,685

9

Maturities of available-for-sale debt securities as of June 30, 2014:

	Amortized Cost		Approximate Fair Value
1-5 years	$	9,514,806	$	9,337,173
6-10 years		14,984,811		14,576,895
After 10 years		7,749,634		7,705,938
Government sponsored mortgage-backed securities not due on a single maturity date		69,518,311		68,688,521
	$	101,767,562	$	100,308,527

The amortized cost and approximate fair values of securities classified as held to maturity are as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Approximate Fair Value
As of June 30, 2014
Debt Securities:
Government sponsored mortgage-backed securities	$	69,862	$	1,766	$	-	$	71,628

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Approximate Fair Value
As of December 31, 2013
Debt Securities:
Government sponsored mortgage-backed securities	$	79,162	$	1,927	$	-	$	81,089

10

Maturities of held-to-maturity securities as of June 30, 2014:

	Amortized Cost		Approximate Fair Value
Government sponsored mortgage-backed securities not due on a single maturity date	$	69,862	$	71,628

The book value of securities pledged as collateral, to secure public deposits and for other purposes, amounted to $47,029,182 and $44,717,470 as of June 30, 2014 and December 31, 2013, respectively. The approximate fair value of pledged securities amounted to $46,098,539 and $42,807,840 as of June 30, 2014 and December 31, 2013, respectively.

Realized gains and losses are recorded as net securities gains. Gains on sales of securities are determined on the specific identification method. Gross gains of $10,691 and $204,983 as of June 30, 2014 and June 30, 2013, respectively, were realized from the sale of available-for-sale securities. The tax effect of these net gains was $3,956 and $75,844 as of June 30, 2014 and June 30, 2013, respectively.

The Company evaluates all securities quarterly to determine if any unrealized losses are deemed to be other than temporary. Certain investment securities are valued at less than their historical cost. These declines are primarily the result of the rate for these investments yielding less than current market rates, or declines in stock prices of equity securities. Based on evaluation of available evidence, management believes the declines in fair value for these securities are temporary. It is management’s intent to hold the debt securities to maturity or until recovery of the unrealized loss. Should the impairment of any of these debt securities become other than temporary, the cost basis of the investment will be reduced and the resulting loss recognized in net income in the period the other-than-temporary impairment is identified, to the extent the loss is related to credit issues, and to other comprehensive income to the extent the decline on debt securities is related to other factors and the Company does not intend to sell the security prior to recovery of the unrealized loss.

          Certain other investments in debt and equity securities are reported in the financial statements at an amount less than their historical cost. Total fair value of these investments at June 30, 2014 and December 31, 2013, was $82,234,766 and $85,712,067, respectively, which is approximately 82% and 88% of the Company’s investment portfolio. These declines primarily resulted from changes in market interest rates and failure of certain investments to meet projected earnings targets.

11

The following table shows gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2014 and December 31, 2013.

	June 30, 2014
	Less than 12 Months					12 Months or More					Total
Description of Securities	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Equity Securities	$	-	$	-		$	33,459	$	(14,468	)	$	33,459	$	(14,468	)
U. S. government agencies		-		-			17,337,226		(521,929	)		17,337,226		(521,929	)
Municipals		2,729,915		(15,070	)		7,181,252		(195,297	)		9,911,167		(210,367	)
Government sponsored mortgage-backed securities		19,800,679		(111,552	)		35,152,236		(1,021,504	)		54,952,914		(1,133,056	)
	$	22,530,594	$	(126,622	)	$	59,704,173	$	(1,753,199	)	$	82,234,766	$	(1,879,821	)

	December 31, 2013
	Less than 12 Months					12 Months or More					Total
Description of Securities	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Equity Securities	$	-	$	-		$	29,014	$	(18,913	)	$	29,014	$	(18,913	)
U. S. government agencies		24,731,730		(916,208	)		7,029,657		(521,270	)		31,761,387		(1,437,478	)
Municipals		10,460,662		(534,440	)		1,701,215		(125,581	)		12,161,877		(660,021	)
Government sponsored mortgage-backed securities		32,074,646		(1,655,296	)		9,685,143		(509,946	)		41,759,789		(2,165,242	)
	$	67,267,038	$	(3,105,944	)	$	18,445,029	$	(1,175,710	)	$	85,712,067	$	(4,281,654	)

12

Note 4: Loans and Allowance for Loan Losses

Categories of loans at June 30, 2014 and December 31, 2013 include:

	June 30,			December 31,
	2014			2013
Real estate - residential mortgage:
One to four family units	$	95,356,636		$	93,797,650
Multi-family		31,969,145			46,188,434
Real estate - construction		39,159,239			43,266,130
Real estate - commercial		188,307,781			179,079,433
Commercial loans		89,248,153			92,721,783
Consumer and other loans		17,074,824			17,303,392
Total loans		461,115,778			472,356,822
Less:
Allowance for loan losses		(6,788,409	)		(7,801,600	)
Deferred loan fees/costs, net		(175,373	)		(175,368	)
Net loans	$	454,151,996		$	464,379,854

Classes of loans by aging at June 30, 2014 and December 31, 2013 were as follows:

As of June 30, 2014
	30-59 Days Past Due		60-89 Days Past Due		90 Days and more Past Due		Total Past Due		Current		Total Loans Receivable		Total Loans > 90 Days and Accruing
	(In Thousands)
Real estate - residential mortgage:
One to four family units	$	14	$	500	$	287	$	801	$	94,556	$	95,357	$	-
Multi-family		-		-		-		-		31,969		31,969		-
Real estate - construction		-		-		-		-		39,159		39,159		-
Real estate - commercial		-		28		-		28		188,280		188,308		-
Commercial loans		-		1,152		-		1,152		88,096		89,248		-
Consumer and other loans		3		38		-		41		17,034		17,075		-
Total	$	17	$	1,718	$	287	$	2,022	$	459,094	$	461,116	$	-

As of December 31, 2013
	30-59 Days Past Due		60-89 Days Past Due		90 Days and more Past Due		Total Past Due		Current		Total Loans Receivable		Total Loans > 90 Days and Accruing
	(In Thousands)
Real estate - residential mortgage:
One to four family units	$	246	$	337	$	-	$	583	$	93,215	$	93,798	$	-
Multi-family		-		-		-		-		46,188		46,188		-
Real estate - construction		-		-		536		536		42,730		43,266		-
Real estate - commercial		-		-		2,604		2,604		176,476		179,080		-
Commercial loans		-		2		3,628		3,630		89,092		92,722		-
Consumer and other loans		19		-		63		82		17,221		17,303		-
Total	$	265	$	339	$	6,831	$	7,435	$	464,922	$	472,357	$	-

13

Nonaccruing loans are summarized as follows:

	June 30,		December 31,
	2014		2013
Real estate - residential mortgage:
One to four family units	$	1,209,618	$	815,746
Multi-family		-		-
Real estate - construction		3,430,492		4,529,410
Real estate - commercial		514,866		3,663,166
Commercial loans		2,651,340		6,776,230
Consumer and other loans		-		63,027
Total	$	7,806,316	$	15,847,579

The following tables present the activity in the allowance for loan losses based on portfolio segment for the three and six months ended June 30, 2014 and 2013:

Three months ended June 30, 2014	Construction			Commercial Real Estate			One to four family			Multi-family			Commercial			Consumer and Other			Unallocated			Total
	(In Thousands)
Allowance for loan losses:
Balance, beginning of period	$	2,008		$	2,344		$	962		$	147		$	1,799		$	228		$	273		$	7,761
Provision charged to expense		76			(51	)		65			(1	)		477			32			(273	)	$	325
Losses charged off		(207	)		(9	)		(14	)		-			(1,058	)		(49	)		-		$	(1,337	)
Recoveries		2			-			1			-			26			10			-		$	39
Balance, end of period	$	1,879		$	2,284		$	1,014		$	146		$	1,244		$	221		$	-		$	6,788

Six months ended June 30, 2014	Construction			Commercial Real Estate			One to four family			Multi-family			Commercial			Consumer and Other			Unallocated			Total
	(In Thousands)
Allowance for loan losses:
Balance, beginning of period	$	2,387		$	2,059		$	997		$	209		$	1,519		$	272		$	359		$	7,802
Provision charged to expense		(304	)		234			114			(63	)		914			(11	)		(359	)	$	525
Losses charged off		(207	)		(9	)		(100	)		-			(1,222	)		(68	)		-		$	(1,606	)
Recoveries		3			-			3			-			33			28			-		$	67
Balance, end of period	$	1,879		$	2,284		$	1,014		$	146		$	1,244		$	221		$	-		$	6,788

14

Three months ended June 30, 2013	Construction			Commercial Real Estate		One to four family			Multi-family		Commercial		Consumer and Other			Unallocated			Total
	(In Thousands)
Allowance for loan losses:
Balance, beginning of period	$	2,253		$	1,911	$	1,234		$	285	$	1,460	$	275		$	694		$	8,112
Provision charged to expense		(282	)		115		66			6		542		(3	)		(194	)	$	250
Losses charged off		-			-		(74	)		-		-		(20	)		-		$	(94	)
Recoveries		28			-		3			-		63		15			-		$	109
Balance, end of period	$	1,999		$	2,026	$	1,229		$	291	$	2,065	$	267		$	500		$	8,377

Six months ended June 30, 2013	Construction			Commercial Real Estate			One to four family			Multi-family		Commercial			Consumer and Other			Unallocated		Total
	(In Thousands)
Allowance for loan losses:
Balance, beginning of period	$	2,525		$	2,517		$	1,316		$	284	$	1,689		$	255		$	154	$	8,740
Provision charged to expense		(126	)		(305	)		40			7		651			37			346	$	650
Losses charged off		(438	)		(186	)		(134	)		-		(373	)		(53	)		-	$	(1,184	)
Recoveries		38			-			7			-		98			28			-	$	171
Balance, end of period	$	1,999		$	2,026		$	1,229		$	291	$	2,065		$	267		$	500	$	8,377

The following tables present the recorded investment in loans based on portfolio segment and impairment method as of June 30, 2014 and December 31, 2013:

As of June 30, 2014

	Construction		Commercial Real Estate		One to four family		Multi-family		Commercial		Consumer and Other		Unallocated		Total
	(In Thousands)
Allowance for loan losses:
Ending balance: individually evaluated for impairment	$	515	$	185	$	48	$	-	$	-	$	10	$	-	$	758
Ending balance: collectively evaluated for impairment	$	1,364	$	2,099	$	966	$	146	$	1,244	$	211	$	-	$	6,030
Loans:
Ending balance: individually evaluated for impairment	$	3,430	$	515	$	1,210	$	-	$	3,438	$	273	$	-	$	8,866
Ending balance: collectively evaluated for impairment	$	35,729	$	187,793	$	94,147	$	31,969	$	85,810	$	16,802	$	-	$	452,250

December 31, 2013 

	Construction		Commercial Real Estate		One to four family		Multi-family		Commercial		Consumer and Other		Unallocated		Total
	(In Thousands)
Allowance for loan losses:
Ending balance: individually evaluated for impairment	$	890	$	-	$	8	$	-	$	601	$	102	$	-	$	1,601
Ending balance: collectively evaluated for impairment	$	1,497	$	2,059	$	989	$	209	$	918	$	170	$	359	$	6,201
Loans:
Ending balance: individually evaluated for impairment	$	4,530	$	3,663	$	886	$	-	$	6,776	$	316	$	-	$	16,171
Ending balance: collectively evaluated for impairment	$	38,736	$	175,417	$	92,912	$	46,188	$	85,946	$	16,987	$	-	$	456,186

15

The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to income. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance.

The allowance for loan losses is evaluated on a regular basis by management and is based upon management’s periodic review of the collectibility of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available.

The allowance consists of allocated and general components. The allocated component relates to loans that are classified as impaired. For those loans that are classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. The general component covers nonclassified loans and is based on historical charge-off experience and expected loss given default derived from the Bank’s internal risk rating process. Other adjustments may be made to the allowance for pools of loans after an assessment of internal or external influences on credit quality that are not fully reflected in the historical loss or risk rating data.

A loan is considered impaired when, based on current information and events, it is probable that the Bank will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price or the fair value of the collateral if the loan is collateral dependent.

Groups of loans with similar risk characteristics are collectively evaluated for impairment based on the group’s historical loss experience adjusted for changes in trends, conditions and other relevant factors that affect repayment of the loans.

16

The following table summarizes the recorded investment in impaired loans at June 30, 2014 and December 31, 2013:

	June 30, 2014						December 31, 2013
	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Recorded Balance		Unpaid Principal Balance		Specific Allowance
	(In Thousands)
Loans without a specific valuation allowance
Real estate - residential mortgage:
One to four family units	$	896	$	896	$	-	$	620	$	620	$	-
Multi-family		-		-		-		-		-		-
Real estate - construction		93		93		-		96		940		-
Real estate - commercial		28		37		-		3,663		3,663		-
Commercial loans		3,438		4,254		-		2,327		2,462		-
Consumer and other loans		-		-		-		-		-		-
Loans with a specific valuation allowance
Real estate - residential mortgage:
One to four family units	$	314	$	314	$	48	$	267	$	267	$	8
Multi-family		-		-		-		-		-		-
Real estate - construction		3,337		4,388		515		4,433		4,433		890
Real estate - commercial		487		487		185		-		-		-
Commercial loans		-		-		-		4,449		5,148		601
Consumer and other loans		273		273		10		316		316		102
Total
Real estate - residential mortgage:
One to four family units	$	1,210	$	1,210	$	48	$	887	$	887	$	8
Multi-family		-		-		-		-		-		-
Real estate - construction		3,430		4,481		515		4,529		5,373		890
Real estate - commercial		515		524		185		3,663		3,663		-
Commercial loans		3,438		4,254		-		6,776		7,610		601
Consumer and other loans		273		273		10		316		316		102
Total	$	8,866	$	10,742	$	758	$	16,171	$	17,849	$	1,601

17

The following table summarizes average impaired loans and related interest recognized on impaired loans for the three and six months ended June 30, 2014 and 2013:

	For the Three Months Ended				For the Three Months Ended
	June 30, 2014				June 30, 2013
	Average Investment in Impaired Loans		Interest Income Recognized		Average Investment in Impaired Loans		Interest Income Recognized
	(In Thousands)
Loans without a specific valuation allowance
Real estate - residential mortgage:
One to four family units	$	823	$	-	$	2,164	$	1
Multi-family		-		-		-		-
Real estate - construction		94		-		5,320		-
Real estate - commercial		264		-		5,095		13
Commercial loans		3,486		98		648		-
Consumer and other loans		-		-		96		-
Loans with a specific valuation allowance
Real estate - residential mortgage:
One to four family units	$	325	$	-	$	181	$	-
Multi-family		-		-		-		-
Real estate - construction		3,532		-		613		-
Real estate - commercial		574		-		-		-
Commercial loans		699		-		3,230		-
Consumer and other loans		272		-		305		-
Total
Real estate - residential mortgage:
One to four family units	$	1,148	$	-	$	2,345	$	1
Multi-family		-		-		-		-
Real estate - construction		3,626		-		5,933		-
Real estate - commercial		838		-		5,095		13
Commercial loans		4,185		98		3,878		-
Consumer and other loans		272		-		401		-
Total	$	10,069	$	98	$	17,652	$	14

18

	For the Six Months Ended				For the Six Months Ended
	June 30, 2014				June 30, 2013
	Average Investment in Impaired Loans		Interest Income Recognized		Average Investment in Impaired Loans		Interest Income Recognized
	(In Thousands)
Loans without a specific valuation allowance
Real estate - residential mortgage:
One to four family units	$	752	$	1	$	2,152	$	3
Multi-family		-		-		-		-
Real estate - construction		95		-		5,214		-
Real estate - commercial		408		-		4,142		36
Commercial loans		3,088		98		646		1
Consumer and other loans		-		-		99		-
Loans with a specific valuation allowance
Real estate - residential mortgage:
One to four family units	$	329	$	-	$	144	$	-
Multi-family		-		-		-		-
Real estate - construction		3,883		-		859		-
Real estate - commercial		412		-		1,122		-
Commercial loans		1,897		-		2,756		-
Consumer and other loans		375		-		339		-
Total
Real estate - residential mortgage:
One to four family units	$	1,081	$	1	$	2,296	$	3
Multi-family		-		-		-		-
Real estate - construction		3,978		-		6,073		-
Real estate - commercial		820		-		5,264		36
Commercial loans		4,985		98		3,402		1
Consumer and other loans		375		-		438		-
Total	$	11,239	$	99	$	17,473	$	40

At June 30, 2014, the Bank’s impaired loans shown in the table above included loans that were classified as troubled debt restructurings (“TDR”). The restructuring of a loan is considered a TDR if both (i) the borrower is experiencing financial difficulties and (ii) the creditor has granted a concession.

In assessing whether or not a borrower is experiencing financial difficulties, the Bank considers information currently available regarding the financial condition of the borrower. This information includes, but is not limited to, whether (i) the debtor is currently in payment default on any of its debt; (ii) a payment default is probable in the foreseeable future without the modification; (iii) the debtor has declared or is in the process of declaring bankruptcy and (iv) the debtor’s projected cash flow is sufficient to satisfy the contractual payments due under the original terms of the loan without a modification.

The Bank considers all aspects of the modification to loan terms to determine whether or not a concession has been granted to the borrower. Key factors considered by the Bank include the debtor’s ability to access funds at a market rate for debt with similar risk characteristics, the significance of the modification relative to unpaid principal balance or collateral value of the debt, and the significance of a delay in the timing of payments relative to the original contractual terms of the loan. The most common concessions granted by the Bank generally include one or more modifications to the terms of the debt, such as (i) a reduction in the interest rate for the remaining life of the debt, (ii) an extension of the maturity date at an interest rate lower than the current market rate for new debt with similar risk, (iii) a reduction on the face amount or maturity amount of the debt as stated in the original loan, (iv) a temporary period of interest-only payments, (v) a reduction in accrued interest, and (vi) an extension of amortization.

19

The following table summarizes, by class, loans that were newly classified as TDRs for the three months ended June 30, 2014:

	Number of Loans		Pre-Modification Outstanding Recorded Balance		Post-Modification Outstanding Recorded Balance
Real estate - residential mortgage:
One to four family units		1	$	287,500	$	287,500
Multi-family		-		-		-
Real estate - construction		-		-		-
Real estate - commercial		-		-		-
Commercial loans		-		-		-
Consumer and other loans		-		-		-
Total		1	$	287,500	$	287,500

The following table summarizes, by type of concession, loans that were newly classified as TDRs for the three months ended June 30, 2014:

	Interest Rate		Term		Combination		Total Modification
Real estate - residential mortgage:
One to four family units	$	-	$	-	$	287,500	$	287,500
Multi-family		-		-		-		-
Real estate - construction		-		-		-		-
Real estate - commercial		-		-		-		-
Commercial loans		-		-		-		-
Consumer and other loans		-		-		-		-
Total	$	-	$	-	$	287,500	$	287,500

20

The following table presents the carrying balance of TDRs as of June 30, 2014 and December 31, 2013:

	June 30,		December 31,
	2014		2013
Real estate - residential mortgage:
One to four family units	$	790,476	$	519,718
Multi-family		-		-
Real estate - construction		3,411,014		4,507,190
Real estate - commercial		486,612		3,026,931
Commercial loans		2,285,821		3,699,243
Consumer and other loans		-		-
Total	$	6,973,923	$	11,753,082

The Bank has allocated $742,651 and $1,146,359 of specific reserves to customers whose loan terms have been modified in a TDR as of June 30, 2014 and December 31, 2013, respectively.

There was one commercial TDR totaling $391,364 for which there was a payment default within twelve months following the modification during the three months ending June 30, 2014. There were two one to four family TDRs totaling $330,000 for which there was a payment default within twelve months following the modification during the three months ending June 30, 2013. A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms.

As part of the on-going monitoring of the credit quality of the Bank’s loan portfolio, management tracks loans by an internal rating system. All loans are assigned an internal credit quality rating based on an analysis of the borrower’s financial condition. The criteria used to assign quality ratings to extensions of credit that exhibit potential problems or well-defined weaknesses are primarily based upon the degree of risk and the likelihood of orderly repayment, and their effect on the Bank’s safety and soundness. The following are the internally assigned ratings:

Pass: This rating represents loans that have strong asset quality and liquidity along with a multi-year track record of profitability.

Special mention: This rating represents loans that are currently protected but are potentially weak. The credit risk may be relatively minor, yet constitute an increased risk in light of the circumstances surrounding a specific loan.

Substandard: This rating represents loans that show signs of continuing negative financial trends and unprofitability and therefore, is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any.

Doubtful: This rating represents loans that have all the weaknesses of substandard classified loans with the additional characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.

Risk characteristics applicable to each segment of the loan portfolio are described as follows.

Real estate-Residential 1-4 family: The residential 1-4 family real estate loans are generally secured by owner-occupied 1-4 family residences. Repayment of these loans is primarily dependent on the personal income and credit rating of the borrowers. Credit risk in these loans can be impacted by economic conditions within the Bank’s market areas that might impact either property values or a borrower’s personal income. Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of borrowers.

21

Real estate-Construction: Construction and land development real estate loans are usually based upon estimates of costs and estimated value of the completed project and include independent appraisal reviews and a financial analysis of the developers and property owners. Sources of repayment of these loans may include permanent loans, sales of developed property or an interim loan commitment from the Bank until permanent financing is obtained. These loans are considered to be higher risk than other real estate loans due to their ultimate repayment being sensitive to interest rate changes, general economic conditions and the availability of long-term financing. Credit risk in these loans may be impacted by the creditworthiness of a borrower, property values and the local economies in the Bank’s market areas.

Real estate-Commercial: Commercial real estate loans typically involve larger principal amounts, and repayment of these loans is generally dependent on the successful operations of the property securing the loan or the business conducted on the property securing the loan. These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Credit risk in these loans may be impacted by the creditworthiness of a borrower, property values and the local economies in the Bank’s market areas.

Commercial: The commercial portfolio includes loans to commercial customers for use in financing working capital needs, equipment purchases and expansions. The loans in this category are repaid primarily from the cash flow of a borrower’s principal business operation. Credit risk in these loans is driven by creditworthiness of a borrower and the economic conditions that impact the cash flow stability from business operations.

Consumer: The consumer loan portfolio consists of various term and line of credit loans such as automobile loans and loans for other personal purposes. Repayment for these types of loans will come from a borrower’s income sources that are typically independent of the loan purpose. Credit risk is driven by consumer economic factors (such as unemployment and general economic conditions in the Bank’s market area) and the creditworthiness of a borrower.

The following tables provide information about the credit quality of the loan portfolio using the Bank’s internal rating system as of June 30, 2014 and December 31, 2013:

June 30, 2014

	Construction		Commercial Real Estate		One to four family		Multi-family		Commercial		Consumer and Other		Total
	(In Thousands)
Rating:
Pass	$	28,105	$	180,408	$	88,541	$	31,554	$	71,914	$	16,872	$	417,394
Special Mention		7,585		3,874		5,103		-		14,487		-		31,049
Substandard		3,469		3,539		1,713		415		2,847		203		12,186
Doubtful		-		487		-		-		-		-		487
Total	$	39,159	$	188,308	$	95,357	$	31,969	$	89,248	$	17,075	$	461,116

December 31, 2013 

	Construction		Commercial Real Estate		One to four family		Multi-family		Commercial		Consumer and Other		Total
	(In Thousands)
Rating:
Pass	$	31,433	$	169,135	$	83,341	$	45,768	$	78,622	$	16,743	$	425,042
Special Mention		7,253		4,721		8,954		420		9,161		107		30,616
Substandard		683		5,224		1,503		-		2,738		453		10,601
Doubtful		3,897		-		-		-		2,201		-		6,098
Total	$	43,266	$	179,080	$	93,798	$	46,188	$	92,722	$	17,303	$	472,357

22

For loans amortized at cost, interest income is accrued based on the unpaid principal balance. Loan origination fees net of certain direct origination costs, are deferred and amortized as a level yield adjustment over the respective term of the loan.

The accrual of interest on loans is discontinued at the time the loan is 90 days past due unless the loan is well-secured and in process of collection. Past due status is based on contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged off at an earlier date if collection of principal or interest is considered doubtful.

All interest accrued but not collected for loans that are placed on nonaccrual or charged off is reversed against interest income. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Note 5: Benefit Plans

The Company has stock-based employee compensation plans, which are described in the Company’s December 31, 2013 Annual Report on Form 10-K.     

The table below summarizes transactions under the Company’s stock option plans for six months ended June 30, 2014:

	Incentive Stock Option			Non-Incentive Stock Option			Weighted Average Exercise Price
Balance outstanding as of January 1, 2014		168,100			121,000		$	16.54
Granted		-			-			-
Exercised		(11,800	)		(4,500	)		5.20
Forfeited		-			(21,500	)		18.00
Balance outstanding as of June 30, 2014		156,300			95,000			17.15
Options exercisable as of June 30, 2014		149,200			85,750			17.98

Stock-based compensation expense, consisting of stock options and restricted stock awards, recognized for the three months ended June 30, 2014 and 2013 was $30,918 and $35,461, respectively. Stock-based compensation expense recognized for the six months ended June 30, 2014 and 2013 was $190,490 and $187,275, respectively. As of June 30, 2014, there was $5,525 of unrecognized compensation expense related to nonvested stock options and $222,210 of unrecognized compensation expense related to nonvested restricted stock awards, which will be recognized over the remaining vesting period.

In February 2014 and January 2013, the Company granted restricted stock to directors pursuant to the 2010 Equity Plan that was fully vested and thus, expensed in full on the date of the grants. The amount expensed was $122,538 and $116,032 for 2014 and 2013, respectively, which represents 11,242 shares of common stock at a market price of $10.90 at the date of grant in 2014 and 16,576 shares of common stock at a market price of $7.00 at the date of grant in 2013.

In February 2014, the company granted 21,820 shares of restricted stock to officers that have a cliff vesting at the end of three years. The expense is being recognized over the applicable vesting period. The amount expensed during the six months ended June 30, 2014 was $31,871.

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Note 6: Income Per Common Share

	For three months ended June 30, 2014						For six months ended June 30, 2014
	Income Available to Common Shareholders		Common Shares Outstanding		Per Common Share		Income Available to Common Shareholders		Common Shares Outstanding		Per Common Share
Basic Income Per Common Share	$	1,227,683		4,265,050	$	0.29	$	2,282,899		3,718,791	$	0.61
Effect of Dilutive Securities				72,430						72,988
Diluted Income Per Common Share	$	1,227,683		4,337,480	$	0.28	$	2,282,899		3,791,779	$	0.60

	For three months ended June 30, 2013						For six months ended June 30, 2013
	Income Available to Common Shareholders		Average Common Shares Outstanding		Per Common Share		Income Available to Common Shareholders		Average Common Shares Outstanding		Per Common Share
Basic Income Per Common Share	$	1,369,110		2,731,727	$	0.50	$	2,123,133		2,735,533	$	0.78
Effect of Dilutive Securities				75,197						72,214
Diluted Income Per Common Share	$	1,369,110		2,806,924	$	0.49	$	2,123,133		2,807,747	$	0.76

Stock options to purchase 136,500 of common stock were outstanding during the three and six months ended June 30, 2014, respectively, and stock options to purchase 197,500 shares of common stock were outstanding during the three and six months ended June 30, 2013, respectively, but were not included in the computation of diluted income per common share because their exercise prices were greater than the average market price of the common shares.

Note 7: New Accounting Pronouncements

In January 2014, the FASB issued ASU No. 2014-01 to amend FASB ASC Topic 323, Investments – Equity Method and Joint Ventures. The objective of this update is to provide guidance on accounting for investments by a reporting entity in flow-through limited liability entities that manage or invest in affordable housing projects that qualify for the low-income housing tax credit. The amendments in the update permit reporting entities to make an accounting policy election to account for their investments in qualified affordable housing projects using the proportional amortization method if certain conditions are met. Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognizes the net investment performance in the income statement as a component of income tax expense (benefit). The update will be effective for the Company beginning January 1, 2015; however, early adoption is permitted. The Company does have significant investments in such qualified affordable housing projects and is currently reviewing the provisions of this update to determine what, if any, impacts it may have on the Company’s financial position or results of operations. The Company expects that there will be no material impact on the Company’s financial position or results of operations, except that the investment amortization expense which is currently included in Other Non-interest Expense in the Consolidated Statements of Income would be removed from Other Non-interest Expense and included in Provision for Income Taxes in the Consolidated Statements of Income. This would have the effect of reducing Non-interest Expense and increasing Provision for Income Taxes, but is not expected to have any impact on Net Income.

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In January 2014, the FASB issued ASU No. 2014-04 to amend FASB ASC Topic 310, Receivables – Troubled Debt Restructurings by Creditors. The objective of the amendments in this update is to reduce diversity by clarifying when an in substance repossession or foreclosure occurs, that is, when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan receivable should be derecognized and the real estate property recognized. The amendments in this update clarify that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additionally, the amendments require interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. The update will be effective for the Company beginning January 1, 2015, and is not expected to have a material impact on the Company’s financial position or results of operations.

Note 8: Disclosures about Fair Value of Assets and Liabilities

ASC Topic 820, Fair Value Measurements, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Topic 820 also specifies a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

Level 1:   Quoted prices in active markets for identical assets or liabilities

Level 2:   Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities

Level 3:   Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities

The following is a description of the inputs and valuation methodologies used for assets measured at fair value on a recurring basis and recognized in the accompanying condensed consolidated balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy.

Available-for-sale securities: Where quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. Level 1 securities include equity securities. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics or discounted cash flows. For these investments, the inputs used by the pricing service to determine fair value may include one or a combination of observable inputs such as benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bid offers and reference data market research publications and are classified within Level 2 of the valuation hierarchy. Level 2 securities include U.S. government agencies and government sponsored mortgage-backed securities. The Company has no Level 3 securities.

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The following table presents the fair value measurements of assets recognized in the accompanying condensed consolidated balance sheets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at June 30, 2014 and December 31, 2013 (dollar amounts in thousands):

June 30, 2014
Financial assets:
	Level 1 inputs		Level 2 inputs		Level 3 inputs		Total fair value
Equity securities	$	106	$	-	$	-	$	106
Debt securities:
U.S. government agencies		-		17,337		-		17,337
Municipals		-		14,283		-		14,283
Government sponsored mortgage-backed securities		-		68,689		-		68,689
Available-for-sale securities	$	106	$	100,309	$	-	$	100,415

December 31, 2013
Financial assets:
	Level 1 inputs		Level 2 inputs		Level 3 inputs		Total fair value
Equity securities	$	99	$	-	$	-	$	99
Debt securities:
U.S. government agencies		-		31,762		-		31,762
Municipals		-		13,493		-		13,493
Corporate Bonds		-		994		-		994
Government sponsored mortgage-backed securities		-		51,345		-		51,345
Available-for-sale securities	$	99	$	97,594	$	-	$	97,693

The following is a description of the valuation methodologies used for assets measured at fair value on a nonrecurring basis and recognized in the accompanying balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy.

Foreclosed Assets Held for Sale:   Fair value is estimated using recent appraisals, comparable sales and other estimates of value obtained principally from independent sources, adjusted for selling costs. Foreclosed assets held for sale are classified within Level 3 of the valuation hierarchy.

Impaired loans (Collateral Dependent):   Loans for which it is probable that the Company will not collect all principal and interest due according to contractual terms are measured for impairment. Allowable methods for determining the amount of impairment include estimating fair value using the fair value of the collateral for collateral dependent loans.

If the impaired loan is identified as collateral dependent, then the fair value method of measuring the amount of impairment is utilized. This method requires obtaining a current independent appraisal of the collateral and applying a discount factor to the value. Impaired loans that are collateral dependent are classified within Level 3 of the fair value hierarchy when impairment is determined using the fair value method.

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The following table presents the fair value measurement of assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at June 30, 2014 and December 31, 2013 (dollar amounts in thousands):

Impaired loans:
	Level 1 inputs		Level 2 inputs		Level 3 inputs		Total fair value
June 30, 2014	$	-	$	-	$	7,069	$	7,069
December 31, 2013	$	-	$	-	$	10,305	$	10,305

Foreclosed assets held for sale:
	Level 1 inputs		Level 2 inputs		Level 3 inputs		Total fair value
June 30, 2014	$	-	$	-	$	-	$	-
December 31, 2013	$	-	$	-	$	2,340	$	2,340

There were no transfers between valuation levels for any asset during the six months ended June 30, 2014 or 2013. If valuation techniques are deemed necessary, the Company considers those transfers to occur at the end of the period when the assets are valued.

The following table presents quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurement (dollar amounts in thousands):

	Fair Value June 30, 2014		Valuation Technique	Unobservable Input	Range (Weighted Average)
Impaired loans (collateral dependent)	$	7,069	Market Comparable	Discount to reflect realizable value		0%-38	%	(12%)
Impaired loans	$	-	Discounted cash flow	Discount rate		0	%
Foreclosed assets held for sale	$	-	Market Comparable	Discount to reflect realizable value		0	%

The following methods were used to estimate the fair value of all other financial instruments recognized in the accompanying condensed consolidated balance sheets at amounts other than fair value.

Cash and cash equivalents, interest-bearing deposits and Federal Home Loan Bank stock

The carrying amounts reported in the condensed consolidated balance sheets approximate those assets' fair value.

Held-to-maturity securities

Fair value is based on quoted market prices, if available. If a quoted market price is not available, fair value is estimated using quoted market prices for similar securities.

Loans

The fair value of loans is estimated by discounting the future cash flows using the market rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. Loans with similar characteristics were aggregated for purposes of the calculations. The carrying amount of accrued interest approximates its fair value.

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Deposits

Deposits include demand deposits, savings accounts, NOW accounts and certain money market deposits. The carrying amount approximates fair value. The fair value of fixed-maturity certificates of deposit is estimated by discounting the future cash flows using rates currently offered for deposits of similar remaining maturities.

Federal Home Loan Bank advances and securities sold under agreements to repurchase

The fair value of advances and securities sold under agreements to repurchase is estimated by using rates on debt with similar terms and remaining maturities.

Subordinated debentures

For these variable rate instruments, the carrying amount is a reasonable estimate of fair value. There is currently a limited market for similar debt instruments and the Company has the option to call the subordinated debentures at an amount close to its par value.

Interest payable

The carrying amount approximates fair value.

Commitments to originate loans, letters of credit and lines of credit

The fair value of commitments to originate loans is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present credit worthiness of the counterparties. For fixed-rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates. The fair value of letters of credit and lines of credit are based on fees currently charged for similar agreements or on the estimated cost to terminate them or otherwise settle the obligations with the counterparties at the reporting date.

The following tables present estimated fair values of the Company’s financial instruments at June 30, 2014 and December 31, 2013.

	June 30, 2014
	Carrying Amount		Fair Value		Hierarchy Level
Financial assets:
Cash and cash equivalents	$	20,831,026	$	20,831,026		1
Held-to-maturity securities		69,862		71,628		2
Federal Home Loan Bank stock		2,878,900		2,878,900		2
Mortgage loans held for sale		1,221,633		1,221,633		2
Loans, net		454,151,996		456,076,651		3
Interest receivable		1,839,238		1,839,238		2
Financial liabilities:
Deposits		481,152,569		472,721,120		2
Federal Home Loan Bank advances		53,400,000		55,526,499		2
Securities sold under agreements to repurchase		10,000,000		10,529,097		2
Subordinated debentures		15,465,000		15,465,000		3
Interest payable		239,297		239,297		2
Unrecognized financial instruments (net of contractual value):
Commitments to extend credit		-		-		-
Unused lines of credit		-		-		-

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	December 31, 2013
	Carrying Amount		Fair Value		Hierarchy Level
Financial assets:
Cash and cash equivalents	$	12,303,200	$	12,303,200		1
Held-to-maturity securities		79,162		81,089		2
Federal Home Loan Bank stock		2,885,100		2,885,100		2
Mortgage loans held for sale		623,432		623,432		2
Loans, net		464,379,854		466,057,001		3
Interest receivable		1,852,641		1,852,641		2
Financial liabilities:
Deposits		487,318,939		476,503,513		2
Federal Home Loan Bank advances		55,350,000		57,185,083		2
Securities sold under agreements to repurchase		10,000,000		7,978,555		2
Subordinated debentures		15,465,000		15,465,000		3
Interest payable		250,361		250,361		2
Unrecognized financial instruments (net of contractual value):
Commitments to extend credit		-		-		-
Unused lines of credit		-		-		-

Note 9: Preferred Stock and Common Stock Warrants

On January 30, 2009, as part of the U.S. Department of the Treasury's Troubled Asset Relief Program's Capital Purchase Program (“CPP”), the Company entered into a Securities Purchase Agreement - Standard Terms with the United States Department of the Treasury (the "Treasury") pursuant to which the Company sold to the Treasury 17,000 shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series A (the "Series A Preferred Stock") and issued a ten year warrant (the "Warrant") to purchase 459,459 shares of the Company's common stock (the "Common Stock") for $5.55 per share for a total purchase price of $17.0 million.

On June 13, 2012, with regulatory approval, the Company redeemed $5 million of the Series A Preferred Stock, including accrued and unpaid dividends of $19,444.

The Company entered into a Placement Agency Agreement with the Treasury on April 15, 2013 in connection with a private auction by the Treasury of the remaining 12,000 shares of Series A Preferred Stock conducted immediately thereafter. On April 29, 2013, the Treasury settled the sale of such shares of Series A Preferred Stock to the winning bidders in the private auction, consisting of six parties unrelated to the Company.

On May 8, 2013, the Company notified the Treasury of its intent to repurchase the Warrant at its fair market value. The Board of Directors of the Company had previously determined that it would be in the best interest of the Company and its stockholders to repurchase the Warrant and determined the Warrant’s fair market value to be $2,003,250 (the “Fair Market Value”). On May 10, 2013, the Treasury notified the Company that it had accepted the Company’s offer to repurchase the Warrant at its Fair Market Value. Accordingly, on May 15, 2013, the Company entered into a Letter Agreement with Treasury pursuant to which the Company repurchased the Warrant for $2,003,250 in cash. As a result of the aforementioned, the Warrant is no longer issued or outstanding and the Company’s participation in the CPP is completed. In addition, as a result of the Treasury’s sale of the Series A Preferred stock to third-party investors on April 29, 2013, the Treasury no longer possessed any securities issued by the Company.

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On April 3, 2014, the Company received approval from the Board of Governors of the Federal Reserve System to redeem the Company’s remaining $12 million of Series A Preferred Stock that carried a coupon rate of 9.0% per annum. The Company provided the holders of the Series A Preferred Stock with a formal notice of redemption and thirty days thereafter redeemed the Series A Preferred Stock on May 7, 2014, including all accrued and unpaid dividends.

Note 10: Common Stock Offering

On March 7, 2014, the Company closed an underwritten offering of its common stock. The Company raised approximately $17.2 million in gross proceeds by re-issuing 1,499,999 shares of its Treasury Stock, which includes the full exercise of the over-allotment option granted to the underwriters of 195,652 shares, at a price to the public of $11.50 per share.

Net proceeds from the sale of the shares after underwriting discounts and estimated offering expenses were approximately $15.8 million. The Company used the net proceeds from the offering to redeem the remaining 12,000 shares of the Company’s Series A Preferred Stock on May 7, 2014 and intends to use the remaining net proceeds for working capital and for general corporate purposes, including potential future acquisitions.

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

General

The primary function of the Company is to monitor and oversee its investment in the Bank. The Company engages in few other activities, and the Company has no significant assets other than 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 material changes in the Company’s financial condition as of June 30, 2014, and the results of operations for the three and six months ended June 30, 2014 and 2013.

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 this Form 10-Q. When used in this Form 10-Q, words such as “anticipates,” “estimates,” “believes,” “expects,” and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Such statements are subject to risks and uncertainties. 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; changes in the general level of interest rates; changes in general or local economic conditions; changes in federal or state regulations and legislation governing the operations of the Company or the Bank; and other factors set forth in reports and other documents filed by the Company with the SEC from time to time, including the risk factors described under Item 1A. of the Company’s Form 10-K for the fiscal year ended December 31, 2013.

Financial Condition

The Company’s total assets decreased $134,959 (less than 1%) from $619,888,135 as of December 31, 2013, to $619,753,176 as of June 30, 2014.

Available-for-sale securities increased $2,721,856 (3%) from $97,692,685 as of December 31, 2013, to $100,414,541 as of June 30, 2014. The Company had purchases of $25,995,159 offset by sales, maturities and principal payments received of $25,493,804. The market rates on debt securities have improved in the first six months of 2014 resulting in a decline in unrealized losses of $2,522,940.

Net loans receivable decreased by $10,227,858 (2%) from $464,379,854 as of December 31, 2013, to $454,151,996 as of June 30, 2014. During the six month period, commercial real estate loans increased $9,228,348 (5%) and construction loans decreased $4,106,891 (9%). These changes were primarily due to one larger credit classified as construction being completed and transferred to the commercial real estate category. Also, commercial loans decreased $3,473,630 (4%) which was due to various expected payoffs and principal reductions. Permanent multi-family loans decreased $14,219,289 (31%) due to the expected payoff of one large credit. Loans secured by owner occupied one to four unit residential real estate increased $1,558,986 (2%) and installment loans decreased $228,568 (2%). The Company continues to focus its lending efforts in the commercial and owner occupied real estate loan categories, and to reduce its concentrations in non-owner occupied commercial real estate.       

Allowance for loan losses decreased $1,013,191 (13%) from $7,801,600 as of December 31, 2013 to $6,788,409 as of June 30, 2014. In addition to the provision for loan loss of $525,000 recorded by the Company for the six months ended June 30, 2014, loan charge-offs of specific loans (classified as nonperforming at December 31, 2013) exceeded recoveries by $1,538,191. The Company’s decline in overall loan balances during 2014 has reduced the allowance for loan loss reserve requirements. The allowance for loan losses, as a percentage of gross loans outstanding (excluding mortgage loans held for sale), as of June 30, 2014 and December 31, 2013 was 1.47% and 1.65%, respectively. The allowance for loan losses, as a percentage of nonperforming loans outstanding, as of June 30, 2014 and December 31, 2013 was 87.0% and 49.2%, respectively. Management believes the allowance for loan losses is at a level to be sufficient in providing for potential loan losses in the Bank’s existing loan portfolio.

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Deposits decreased $6,166,370 (1%) from $487,318,939 as of December 31, 2013, to $481,152,569 as of June 30, 2014. For the six months ended June 30, 2014, checking and savings accounts decreased by $4,450,771 and certificates of deposit decreased by $1,715,598. See also the discussion under “Quantitative and Qualitative Disclosure about Market Risk – Asset/Liability Management.”

Stockholders’ equity (including unrealized appreciation on available-for-sale securities, net of tax) increased $7,748,527 from $50,355,233 as of December 31, 2013, to $58,103,760 as of June 30, 2014. This increase was due to several factors. First, in an underwritten offering of its common stock, the Company raised approximately $17,200,000 in gross proceeds by re-issuing 1,499,999 shares of its treasury stock. The Company utilized $12.0 million of the net proceeds to redeem the remaining 12,000 shares of its Series A Preferred Stock on May 7, 2014. Secondly, equity increased due to the Company’s net income after preferred stock dividends and accretion of $2,282,899 for the six month period. Finally, as a result of changes in market interest rates, the Company experienced an improvement in the value of its investment portfolio. The equity portion of the Company’s unrealized losses on available-for-sale securities improved by $1,589,452. On a per common share basis, stockholders’ equity decreased from $14.04 as of December 31, 2013 to $13.59 as of June 30, 2014.

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.

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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.

	Three months ended 6/30/2014								Three months ended 6/30/2013
	Average Balance		Interest			Yield / Cost			Average Balance		Interest			Yield / Cost
ASSETS
Interest-earning:
Loans	$	458,046	$	5,576			4.88	%	$	466,387	$	5,952			5.12	%
Investment securities		103,058		415			1.62	%		112,567		467			1.66	%
Other assets		29,359		46			0.63	%		29,897		48			0.64	%
Total interest-earning		590,464		6,038			4.10	%		608,851		6,467			4.26	%
Noninterest-earning		33,598								39,969
	$	624,062							$	648,820
LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest-bearing:
Savings accounts	$	24,629		12			0.20	%	$	24,135		14			0.23	%
Transaction accounts		256,558		215			0.34	%		267,882		265			0.40	%
Certificates of deposit		163,598		335			0.82	%		182,772		453			0.99	%
FHLB advances		52,362		299			2.29	%		52,983		308			2.33	%
Securities sold under agreements to repurchase		10,000		66			2.65	%		16,452		108			2.63	%
Subordinated debentures		15,465		133			3.45	%		15,465		134			3.48	%
Total interest-bearing		522,612		1,060			0.81	%		559,688		1,281			0.92	%
Noninterest-bearing		39,020								38,210
Total liabilities		561,632								597,898
Stockholders’ equity		62,430								50,922
	$	624,062							$	648,820
Net earning balance	$	67,852							$	49,163
Earning yield less costing rate							3.29	%							3.34	%
Net interest income, and net yield spread on interest earning assets			$	4,977			3.38	%			$	5,186			3.42	%
Ratio of interest-earning assets to interest-bearing liabilities				113	%							109	%

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	Six months ended 6/30/2014								Six months ended 6/30/2013
	Average Balance		Interest			Yield / Cost			Average Balance		Interest			Yield / Cost
ASSETS
Interest-earning:
Loans	$	457,498	$	11,444			5.04	%	$	463,050	$	11,881			5.17	%
Investment securities		103,198		873			1.71	%		108,157		899			1.68	%
Other assets		31,359		81			0.52	%		37,515		106			0.57	%
Total interest-earning		592,055		12,398			4.22	%		608,722		12,886			4.27	%
Noninterest-earning		36,588								41,203
	$	628,644							$	649,925
LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest-bearing:
Savings accounts	$	24,339		25			0.20	%	$	24,074		28			0.24	%
Transaction accounts		258,147		453			0.35	%		256,837		532			0.42	%
Certificates of deposit		168,455		692			0.83	%		184,234		933			1.02	%
FHLB advances		52,528		594			2.28	%		59,508		676			2.29	%
Securities sold under agreements to repurchase		10,000		131			2.65	%		20,726		272			2.64	%
Subordinated debentures		15,465		266			3.47	%		15,465		269			3.50	%
Total interest-bearing		528,934		2,161			0.82	%		560,844		2,709			0.97	%
Noninterest-bearing		40,295								37,729
Total liabilities		569,229								598,573
Stockholders’ equity		59,415								51,352
	$	628,644							$	649,925
Net earning balance	$	63,122							$	47,878
Earning yield less costing rate							3.40	%							3.29	%
Net interest income, and net yield spread on interest earning assets			$	10,236			3.49	%			$	10,177			3.37	%
Ratio of interest-earning assets to interest-bearing liabilities				112	%							109	%

Results of Operations - Comparison of Three and Six Month Periods Ended June 30, 2014 and 2013

Net income for the three and six months ended June 30, 2014 was $1,338,683 and $2,640,109, respectively, compared to $1,567,740 and $2,520,393 for the three and six months ended June 30, 2013, respectively, which represents a decrease in net income of $229,057 (15%) for the three month period, and an increase in net income of $119,716 (5%) for the six month period.

Interest Income

Total interest income for the three and six months ended June 30, 2014 decreased $429,437 (7%) and $488,794 (4%), respectively, as compared to the three and six months ended June 30, 2013. For the three and six month periods ended June 30, 2014 compared to the same periods in 2013, the average yield on interest earning assets decreased 16 basis points to 4.10% and 5 basis points to 4.22%, while the average balance of interest earning assets decreased $18,387,000 for the three month period and decreased $16,667,000 for the six month period. For the six month period, the Company recognized approximately $335,000 of interest income on the payoff of a credit relationship that had been classified as non-accrual.

Generally, the Company’s decrease in the average yield on interest earning assets was primarily due to the decline in loan balances for each period compared to the prior year period. Also, strong competition is causing a reduction in rates for new credits as well as maintaining existing credit relationships.

34

Interest Expense

Total interest expense for the three and six months ended June 30, 2014 decreased $221,007 (17%) and $548,264 (20%), respectively, when compared to the three and six months ended June 30, 2013. For the three and six month periods ended June 30, 2014 compared to the same periods in 2013, the average cost of interest bearing liabilities decreased 11 basis points to 0.81% and 15 basis points to 0.82%, respectively, while the average balance of interest bearing liabilities decreased $37,076,000 for the three month period and decreased $31,910,000 for the six month period when compared to the same periods in 2013. The primary reason for the decrease in the average cost of interest bearing liabilities was the continued decline in higher cost certificates of deposits as well as reductions in the average rate paid on transaction deposit balances. Also, the Company reduced its FHLB advances and securities sold under agreements to repurchase during 2013. As a result, interest expense on these borrowings for the three and six months ended June 30, 2014 decreased $51,000 and $222,689, respectively, when compared to the same period in 2013.

Net Interest Income

Net interest income for the three and six months ended June 30, 2014 decreased $208,430 (4%) and increased $59,470 (1%), respectively, when compared to the same periods in 2013. For the three and six month periods ended June 30, 2014, the average balance of net interest earning assets over liabilities increased by approximately $18,689,000 and $15,244,000, respectively, when compared to the same periods in 2013. For the three and six month periods ended June 30, 2014, the net interest margin decreased 4 basis points to 3.38% and increased 12 basis points to 3.49%, respectively, when compared to the same periods in 2013.

Provision for Loan Losses

Provisions for loan losses are charged or credited to earnings to bring the total allowance for loan losses to a level considered adequate by the Company to provide for potential loan losses in the existing loan portfolio. When making its assessment, the Company considers prior loss experience, volume and type of lending, local banking trends and impaired and past due loans in the Company’s loan portfolio. In addition, the Company considers general economic conditions and other factors related to collectability of the Company’s loan portfolio.

Based on its internal analysis and methodology, management recorded a provision for loan losses of $325,000 and $525,000 for the three months and six months ended June 30, 2014, respectively, compared to $250,000 and $650,000 for the same periods in 2013. 

Generally, the overall decrease in the provision for loan losses for the six months ended June 30, 2014 has resulted primarily from declining historic loss rates, which are used to calculate the reserve for the homogenous pool of loans, and an overall decrease in the loan portfolio. The Bank will continue to monitor its allowance for loan losses and make future additions based on economic and regulatory conditions. Management may need to increase the allowance for loan losses through charges to the provision for loan losses if anticipated growth in the Bank’s loan portfolio increases or other circumstances warrant.

Although the Bank maintains its allowance for loan losses at a level which it considers to be sufficient to provide for potential loan losses in its existing loan portfolio, there can be no assurance that future loan 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 loan loss provisions.

35

Noninterest Income

Noninterest income decreased $1,822,049 (68%) and $2,024,124 (55%) for the three months and six months ended June 30, 2014, respectively, when compared to the three months and six months ended June 30, 2013. These declines were attributable to a few factors.

First, during the second quarter of 2013, the Company recognized $1.5 million in gains on its investment portfolio and certain tax credit assets in conjunction with a structured transaction to prepay a $15 million repurchase agreement. Furthermore, gains on investment securities decreased $108,579 (93%) and $194,292 (95%) for the three months and six months ended June 30, 2014, respectively, when compared to the same periods in 2013.

Secondly, gains on sales of loans decreased $341,419 (58%) and $587,774 (57%) for the three months and six months ended June 30, 2014, respectively, when compared to the same periods in 2013. This was primarily due to long-term interest rates increasing significantly during 2013 and into the first quarter of 2014 which dramatically reduced consumer demand for long-term secondary market mortgage loans.

Noninterest Expense

Noninterest expense decreased $1,649,354 (30%) and $1,730,350 (17%) for the three months and six months ended June 30, 2014 when compared to the same periods in 2013 primarily due to a $1.5 million prepayment penalty incurred on the prepayment of a repurchase agreement (further discussed above).      

Salaries and employee benefits decreased $40,783 and $128,377 for the three months and six months ended June 30, 2014 when compared to the same periods in 2013 due to a decline in the overall number of staff compared to the prior year periods and a decline in mortgage commissions from reduced mortgage volume.

Provision for Income Taxes

The provision for income taxes decreased during the three and six month periods compared to the same periods in 2013 due to declines in taxable income. Furthermore, the actual effective tax rate (based on income before income taxes) also declined from the increased utilization of state low income housing tax credits.

Nonperforming Assets

The allowance for loan losses is calculated based upon an evaluation of pertinent factors underlying the various types and quality of the Bank’s existing loan portfolio. When making such evaluation, management considers such factors as the repayment status of its loans, the estimated net realizable value of the underlying collateral, borrowers’ intent (to the extent known by the Bank) and ability to repay the loan, local economic conditions and the Bank’s historical loss ratios. The allowance for loan losses, as a percentage of nonperforming loans outstanding, as of June 30, 2014 and December 31, 2013 was 87.0% and 49.2%, respectively. Total loans classified as substandard, doubtful or loss as of June 30, 2014, were $12.7 million or 2.04% of total assets as compared to $16.7 million, or 2.69% of total assets at December 31, 2013. Management considered nonperforming and total classified loans 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 and assets which have been acquired as a result of foreclosure or deed-in-lieu of foreclosure. All dollar amounts are in thousands.

	6/30/2014			12/31/2013			12/31/2012
Nonperforming loans	$	7,806		$	15,848		$	15,331
Troubled debt restructurings		787			-			-
Real estate acquired in settlement of loans		3,644			3,822			4,530
Total nonperforming assets	$	12,237		$	19,670		$	19,861
Total nonperforming assets as a percentage of total assets		1.97	%		3.17	%		3.01	%
Allowance for loan losses	$	6,788		$	7,802		$	8,740
Allowance for loan losses as a percentage of gross loans		1.47	%		1.65	%		1.83	%

36

Liquidity and Capital Resources

Liquidity refers to the ability to manage future cash flows to meet the needs of depositors and borrowers and fund operations. Maintaining appropriate levels of liquidity allows the Company to have sufficient funds available for customer demand for loans, withdrawal of deposit balances and maturities of deposits and other liabilities. The Company’s primary sources of liquidity include cash and cash equivalents, customer deposits and Federal Home Loan Bank of Des Moines borrowings. The Company also has established borrowing lines available from the Federal Reserve Bank which is considered a secondary source of funds.

The Company’s most liquid assets are cash and cash equivalents, which are cash on hand, amounts due from financial institutions, and certificates of deposit with other financial institutions that have an original maturity of three months or less. The levels of such assets are dependent on the Bank’s operating, financing, and investment activities at any given time. The Company’s cash and cash equivalents totaled $20,831,026 as of June 30, 2014 and $12,303,200 as of December 31, 2013, representing an increase of $8,527,826. The variations in levels of cash and cash equivalents are influenced by many factors but primarily loan originations and payments, deposit flows and anticipated future deposit flows, which are subject to, and influenced by, many factors.

The Bank’s capital ratios are above the levels required to be considered a well-capitalized financial institution. As of June 30, 2014, the Bank’s Tier 1 leverage ratio was 10.93%, its Tier 1 risk-based capital ratio was 14.02% and the Bank’s total risk-based capital ratio was 15.27% - all exceeding the minimums of 5%, 6% and 10%, respectively.

On March 7, 2014, the Company closed an underwritten offering of its common stock. The Company raised approximately $17.2 million in gross proceeds by re-issuing 1,499,999 shares of treasury stock, which includes the full exercise of the over-allotment option granted to the underwriters of 195,652 shares, at a price to the public of $11.50 per share. Net proceeds from the sale of the shares after underwriting discounts and estimated offering expenses were approximately $15.8 million. The Company used the net proceeds from the offering to redeem the remaining 12,000 shares of the Company’s Series A Preferred Stock on May 7, 2014 and intends to use the remaining net proceeds for working capital and for general corporate purposes, including potential future acquisitions.

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.

37

As a part of its asset and liability management strategy and throughout the past several years, the Bank has continued to emphasize the origination of 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.

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. 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, 2014 management’s estimates of the projected changes in net portfolio value (“NPV”) in the event of 100 and 200 basis point (“bp”) instantaneous and permanent increases and decreases in market interest rates. Dollar amounts are expressed in thousands.

BP Change	Estimated Net Portfolio Value								NPV as % of PV of Assets
in Rates	$ Amount		$ Change			% Change			NPV Ratio			Change
+200	$	62,235	$	(4,029	)		-6	%		10.39	%		-0.27	%
+100		63,692		(2,572	)		-4	%		10.45	%		-0.21	%
NC		66,264		-			-			10.66	%		-
-100		68,919		2,655			4	%		10.85	%		0.19	%
-200		75,424		9,161			14	%		11.64	%		0.98	%

Computations of prospective effects of hypothetical interest rate changes are based on an internally generated model using actual maturity and repricing schedules for the Bank’s loans and deposits, 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. For further discussion of the Company’s market risk, see the Interest Rate Sensitivity Analysis Section of Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Company’s 2013 Annual Report on Form 10-K.

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, 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 (the “Board”) is responsible for reviewing the Bank’s asset and liability management policies. The Board meets quarterly to review interest rate risk and trends, as well as liquidity and capital ratios and requirements. The Bank’s management is responsible for administering the policies and determinations of the Board with respect to the Bank’s asset and liability goals and strategies.

38

Item 4. Controls and Procedures 

(a) The Company maintains disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”)) 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.

The Company conducted an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2014.

(b) There have been no changes in the Company’s internal control over financial reporting during the quarter ended June 30, 2014 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

39

PART II

Item 1.     Legal Proceedings

None.

Item 1A. Risk Factors

Not applicable.

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

ISSUER PURCHASES OF EQUITY SECURITIES

The Company has a repurchase plan which was announced on August 20, 2007. This plan authorizes the purchase by the Company of up to 350,000 shares of the Company’s common stock. There is no expiration date for this plan. There are no other repurchase plans in effect at this time. The Company had no repurchase activity of the Company’s common stock during the quarter ended June 30, 2014.

Item 3.     Defaults Upon Senior Securities

Not applicable.

Item 4.     Mine Safety Disclosures

Not applicable.

Item 5.     Other Information

None

Item 6.     Exhibits

11. Statement re: computation of per share earnings (set forth in “Note 6: Income Per Common Share” of the Notes to Condensed Consolidated Financial Statement (unaudited))

31(i).1 Certification of the Principal Executive Officer pursuant to Rule 13a -14(a) of the Exchange Act

31(i).2 Certification of the Principal Financial Officer pursuant to Rule 13a - 14(a) of the Exchange Act

32.1 CEO certification pursuant to 18 U.S.C. Section 1350

32.2 CFO certification pursuant to 18 U.S.C. Section 135

101 The following materials from Guaranty Federal Bancshares, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 formatted in Extensible Business Reporting Language (XBRL): (i) Condensed Consolidated Balance Sheets (unaudited), (ii) Condensed Consolidated Statements of Income (unaudited), (iii) Condensed Consolidated Statements of Comprehensive Income (unaudited), (iv) Condensed Consolidated Statement of Stockholders’ Equity (unaudited), (v) the Condensed Consolidated Statements of Cash Flows (unaudited), and (vi) related notes.*

* Pursuant to Regulation S-T, the interactive data files on Exhibit 101 hereto are deemed not filed or part of  a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

40

SIGNATURES

Pursuant to 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/ Shaun A. Burke	August 8, 2014
Shaun A. Burke
President and Chief Executive Officer
(Principal Executive Officer and Duly Authorized Officer)
/s/ Carter Peters	August 8, 2014
Carter Peters
Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)

41

EX-31

Exhibit 31(i).1

Certification of the Principal Executive Officer

Rule 13a – 14(a) of the Securities Exchange Act of 1934

I, Shaun A. Burke, certify that:

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

2. Based on my knowledge, this 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 report;

3. Based on my knowledge, the financial statements, and other financial information included in this 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 report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 8, 2014	/s/ Shaun A. Burke
	Shaun A. Burke
	Chief Executive Officer
	(Principal Executive Officer)

42

EX-31

Exhibit 31(i).2

Certification of the Principal Financial Officer

Rule 13a – 14(a) of the Securities Exchange Act of 1934

I, Carter Peters, certify that:

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

2. Based on my knowledge, this 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 report;

3. Based on my knowledge, the financial statements, and other financial information included in this 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 report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 8, 2014	/s/ Carter Peters
	Carter Peters
	Chief Financial Officer
	(Principal Financial Officer)

43

EX-32

Exhibit 32.1

CEO CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350*

In connection with the Quarterly Report of Guaranty Federal Bancshares, Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Shaun A. Burke, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1.     The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.     The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Shaun A. Burke

Shaun A. Burke
Chief Executive Officer

(Principal Executive Officer)

August 8, 2014

* A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

44

EX-32

Exhibit 32.2

CFO CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350*

In connection with the Quarterly Report of Guaranty Federal Bancshares, Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Carter Peters, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1.     The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.     The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Carter Peters

Carter Peters
Chief Financial Officer

(Principal Financial Officer)

August 8, 2014

* A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

45

XML

Note 6 - Income Per Common Share (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Earnings Per Share [Abstract]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	136,500	197,500	136,500	197,500

XML

Note 4 - Loans and Allowance for Loan Losses (Details) - Allowance for Loan Losses (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
Allowance for loan losses:
Allowance for loan losses, beginning of period	$ 7,761,000	$ 8,112,000	$ 7,801,600	$ 8,740,000
Allowance for loan losses, end of period	6,788,409	8,377,000	6,788,409	8,377,000
Provision charged to expense	325,000	250,000	525,000	650,000
Losses charged off	(1,337,000)	(94,000)	(1,606,000)	(1,184,000)
Recoveries	39,000	109,000	67,000	171,000
Allowance for loan losses:
Allowance for loan losses ending balance: individually evaluated for impairment	758,000		758,000		1,601,000
Allowance for loan losses ending balance: collectively evaluated for impairment	6,030,000		6,030,000		6,201,000
Loans:
Loans ending balance: individually evaluated for impairment	8,866,000		8,866,000		16,171,000
Loans ending balance: collectively evaluated for impairment	452,250,000		452,250,000		456,186,000
Construction [Member]
Allowance for loan losses:
Allowance for loan losses, beginning of period	2,008,000	2,253,000	2,387,000	2,525,000
Allowance for loan losses, end of period	1,879,000	1,999,000	1,879,000	1,999,000
Provision charged to expense	76,000	(282,000)	(304,000)	(126,000)
Losses charged off	(207,000)		(207,000)	(438,000)
Recoveries	2,000	28,000	3,000	38,000
Allowance for loan losses:
Allowance for loan losses ending balance: individually evaluated for impairment	515,000		515,000		890,000
Allowance for loan losses ending balance: collectively evaluated for impairment	1,364,000		1,364,000		1,497,000
Loans:
Loans ending balance: individually evaluated for impairment	3,430,000		3,430,000		4,530,000
Loans ending balance: collectively evaluated for impairment	35,729,000		35,729,000		38,736,000
Real Estate Commercial [Member]
Allowance for loan losses:
Allowance for loan losses, beginning of period	2,344,000	1,911,000	2,059,000	2,517,000
Allowance for loan losses, end of period	2,284,000	2,026,000	2,284,000	2,026,000
Provision charged to expense	(51,000)	115,000	234,000	(305,000)
Losses charged off	(9,000)		(9,000)	(186,000)
Allowance for loan losses:
Allowance for loan losses ending balance: individually evaluated for impairment	185,000		185,000
Allowance for loan losses ending balance: collectively evaluated for impairment	2,099,000		2,099,000		2,059,000
Loans:
Loans ending balance: individually evaluated for impairment	515,000		515,000		3,663,000
Loans ending balance: collectively evaluated for impairment	187,793,000		187,793,000		175,417,000
One to Four Family Units [Member]
Allowance for loan losses:
Allowance for loan losses, beginning of period	962,000	1,234,000	997,000	1,316,000
Allowance for loan losses, end of period	1,014,000	1,229,000	1,014,000	1,229,000
Provision charged to expense	65,000	66,000	114,000	40,000
Losses charged off	(14,000)	(74,000)	(100,000)	(134,000)
Recoveries	1,000	3,000	3,000	7,000
Allowance for loan losses:
Allowance for loan losses ending balance: individually evaluated for impairment	48,000		48,000		8,000
Allowance for loan losses ending balance: collectively evaluated for impairment	966,000		966,000		989,000
Loans:
Loans ending balance: individually evaluated for impairment	1,210,000		1,210,000		886,000
Loans ending balance: collectively evaluated for impairment	94,147,000		94,147,000		92,912,000
Multi-Family Units [Member]
Allowance for loan losses:
Allowance for loan losses, beginning of period	147,000	285,000	209,000	284,000
Allowance for loan losses, end of period	146,000	291,000	146,000	291,000
Provision charged to expense	(1,000)	6,000	(63,000)	7,000
Allowance for loan losses:
Allowance for loan losses ending balance: collectively evaluated for impairment	146,000		146,000		209,000
Loans:
Loans ending balance: collectively evaluated for impairment	31,969,000		31,969,000		46,188,000
Commercial Loans [Member]
Allowance for loan losses:
Allowance for loan losses, beginning of period	1,799,000	1,460,000	1,519,000	1,689,000
Allowance for loan losses, end of period	1,244,000	2,065,000	1,244,000	2,065,000
Provision charged to expense	477,000	542,000	914,000	651,000
Losses charged off	(1,058,000)		(1,222,000)	(373,000)
Recoveries	26,000	63,000	33,000	98,000
Allowance for loan losses:
Allowance for loan losses ending balance: individually evaluated for impairment					601,000
Allowance for loan losses ending balance: collectively evaluated for impairment	1,244,000		1,244,000		918,000
Loans:
Loans ending balance: individually evaluated for impairment	3,438,000		3,438,000		6,776,000
Loans ending balance: collectively evaluated for impairment	85,810,000		85,810,000		85,946,000
Consumer and Other Loans [Member]
Allowance for loan losses:
Allowance for loan losses, beginning of period	228,000	275,000	272,000	255,000
Allowance for loan losses, end of period	221,000	267,000	221,000	267,000
Provision charged to expense	32,000	(3,000)	(11,000)	37,000
Losses charged off	(49,000)	(20,000)	(68,000)	(53,000)
Recoveries	10,000	15,000	28,000	28,000
Allowance for loan losses:
Allowance for loan losses ending balance: individually evaluated for impairment	10,000		10,000		102,000
Allowance for loan losses ending balance: collectively evaluated for impairment	211,000		211,000		170,000
Loans:
Loans ending balance: individually evaluated for impairment	273,000		273,000		316,000
Loans ending balance: collectively evaluated for impairment	16,802,000		16,802,000		16,987,000
Unallocated [Member]
Allowance for loan losses:
Allowance for loan losses, beginning of period	273,000	694,000	359,000	154,000
Allowance for loan losses, end of period		500,000		500,000
Provision charged to expense	(273,000)	(194,000)	(359,000)	346,000
Allowance for loan losses:
Allowance for loan losses ending balance: collectively evaluated for impairment					$ 359,000

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Note 3 - Securities (Details) - Available-for-sale Securities by Maturity (USD $)	Jun. 30, 2014
Available-for-sale Securities by Maturity [Abstract]
1-5 years	$ 9,514,806
1-5 years	9,337,173
6-10 years	14,984,811
6-10 years	14,576,895
After 10 years	7,749,634
After 10 years	7,705,938
Government sponsored mortgage-backed securities not due on a single maturity date	69,518,311
Government sponsored mortgage-backed securities not due on a single maturity date	68,688,521
	101,767,562
	$ 100,308,527

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Note 8 - Disclosures about Fair Value of Assets and Liabilities (Details) - Fair Value of Assets Measured on Non-Recurring Basis (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Impaired Loans [Member] | Fair Value, Inputs, Level 3 [Member]
Note 8 - Disclosures about Fair Value of Assets and Liabilities (Details) - Fair Value of Assets Measured on Non-Recurring Basis [Line Items]
Assets measured at fair value on a nonrecurring basis	$ 7,069	$ 10,305
Impaired Loans [Member]
Note 8 - Disclosures about Fair Value of Assets and Liabilities (Details) - Fair Value of Assets Measured on Non-Recurring Basis [Line Items]
Assets measured at fair value on a nonrecurring basis	7,069	10,305
Foreclosed Assets Held for Sale [Member] | Fair Value, Inputs, Level 3 [Member]
Note 8 - Disclosures about Fair Value of Assets and Liabilities (Details) - Fair Value of Assets Measured on Non-Recurring Basis [Line Items]
Assets measured at fair value on a nonrecurring basis		2,340
Foreclosed Assets Held for Sale [Member]
Note 8 - Disclosures about Fair Value of Assets and Liabilities (Details) - Fair Value of Assets Measured on Non-Recurring Basis [Line Items]
Assets measured at fair value on a nonrecurring basis		$ 2,340

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Note 5 - Benefit Plans (Details) (USD $)	1 Months Ended	3 Months Ended		6 Months Ended			1 Months Ended				1 Months Ended
	Jan. 31, 2013	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014 Employee Stock Option [Member]	Feb. 28, 2014 Restricted Stock [Member] Director [Member] 2010 Equity Plan [Member]	Jan. 31, 2013 Restricted Stock [Member] Director [Member] 2010 Equity Plan [Member]	Feb. 28, 2014 Restricted Stock [Member] Officer [Member]	Jun. 30, 2014 Restricted Stock [Member]	Feb. 28, 2014 Director [Member]
Note 5 - Benefit Plans (Details) [Line Items]
Allocated Share-based Compensation Expense		$ 30,918	$ 35,461	$ 190,490	$ 187,275
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized						5,525				222,210
Restricted Stock or Unit Expense	$ 116,032			$ 31,871							$ 122,538
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures (in Shares)							11,242	16,576
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value (in Dollars per share)							$ 10.90	$ 7.00
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in Shares)									21,820
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Cliff Vesting Period									3 years

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Note 1 - Basis of Presentation

6 Months Ended

Jun. 30, 2014

Disclosure Text Block [Abstract]

Business Description and Basis of Presentation [Text Block]

Note 1: Basis of Presentation

The accompanying unaudited interim condensed 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.

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in Guaranty Federal Bancshares, Inc.’s (the “Company”) Annual Report on Form 10-K for the year ended December 31, 2013 filed with the Securities and Exchange Commission (the “SEC”). The results of operations for the periods are not necessarily indicative of the results to be expected for the full year. The condensed consolidated balance sheet of the Company as of December 31, 2013, 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.

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Note 8 - Disclosures about Fair Value of Assets and Liabilities (Details) - Fair Value Quantitative Information (USD $) In Thousands, unless otherwise specified			6 Months Ended
	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2014 Foreclosed Assets Held for Sale [Member] Fair Value, Inputs, Level 3 [Member]	Jun. 30, 2014 Collateral Dependent [Member] Fair Value, Inputs, Level 3 [Member]	Jun. 30, 2014 Collateral Dependent [Member] Fair Value, Inputs, Level 3 [Member] Minimum [Member]	Jun. 30, 2014 Collateral Dependent [Member] Fair Value, Inputs, Level 3 [Member] Maximum [Member]	Jun. 30, 2014 Collateral Dependent [Member] Fair Value, Inputs, Level 3 [Member] Weighted Average [Member]	Jun. 30, 2014 Fair Value, Inputs, Level 3 [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets, fair value	$ 8,866	$ 16,171		$ 7,069
Valuation technique			Market Comparable	Market Comparable				Discounted cash flow
Unobservable input			Discount to reflect realizable value	Discount to reflect realizable value				Discount rate
Range (weighted average)			0.00%		0.00%	38.00%	(12.00%)	0.00%

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Note 4 - Loans and Allowance for Loan Losses (Details) (USD $)			3 Months Ended
	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2014 Commercial Portfolio Segment [Member]	Jun. 30, 2013 One to Four Family Units [Member]
Note 4 - Loans and Allowance for Loan Losses (Details) [Line Items]
Allowance for Credit Losses, Change in Method of Calculating Impairment	$ 742,651	$ 1,146,359
Financing Receivable, Modifications, Subsequent Default, Number of Contracts			1	2
Financing Receivable, Modifications, Subsequent Default, Recorded Investment			$ 391,364	$ 330,000

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Note 3 - Securities (Details) - Securities in a Continuous Unrealized Loss Position (USD $)	Jun. 30, 2014	Dec. 31, 2013
Note 3 - Securities (Details) - Securities in a Continuous Unrealized Loss Position [Line Items]
Securities, continuous unrealized loss position, less than 12 months, fair value	$ 22,530,594	$ 67,267,038
Securities, continuous unrealized loss position, less than 12 months, unrealized losses	(126,622)	(3,105,944)
Securities, continuous unrealized loss position, 12 months or more, fair value	59,704,173	18,445,029
Securities, continuous unrealized loss position, 12 months or more, unrealized losses	(1,753,199)	(1,175,710)
Securities, continuous unrealized loss position, fair value	82,234,766	85,712,067
Securities, continuous unrealized loss position, unrealized losses	(1,879,821)	(4,281,654)
Equity Securities [Member]
Note 3 - Securities (Details) - Securities in a Continuous Unrealized Loss Position [Line Items]
Securities, continuous unrealized loss position, 12 months or more, fair value	33,459	29,014
Securities, continuous unrealized loss position, 12 months or more, unrealized losses	(14,468)	(18,913)
Securities, continuous unrealized loss position, fair value	33,459	29,014
Securities, continuous unrealized loss position, unrealized losses	(14,468)	(18,913)
US Government Agencies Debt Securities [Member]
Note 3 - Securities (Details) - Securities in a Continuous Unrealized Loss Position [Line Items]
Securities, continuous unrealized loss position, less than 12 months, fair value		24,731,730
Securities, continuous unrealized loss position, less than 12 months, unrealized losses		(916,208)
Securities, continuous unrealized loss position, 12 months or more, fair value	17,337,226	7,029,657
Securities, continuous unrealized loss position, 12 months or more, unrealized losses	(521,929)	(521,270)
Securities, continuous unrealized loss position, fair value	17,337,226	31,761,387
Securities, continuous unrealized loss position, unrealized losses	(521,929)	(1,437,478)
US States and Political Subdivisions Debt Securities [Member]
Note 3 - Securities (Details) - Securities in a Continuous Unrealized Loss Position [Line Items]
Securities, continuous unrealized loss position, less than 12 months, fair value	2,729,915	10,460,662
Securities, continuous unrealized loss position, less than 12 months, unrealized losses	(15,070)	(534,440)
Securities, continuous unrealized loss position, 12 months or more, fair value	7,181,252	1,701,215
Securities, continuous unrealized loss position, 12 months or more, unrealized losses	(195,297)	(125,581)
Securities, continuous unrealized loss position, fair value	9,911,167	12,161,877
Securities, continuous unrealized loss position, unrealized losses	(210,367)	(660,021)
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Note 3 - Securities (Details) - Securities in a Continuous Unrealized Loss Position [Line Items]
Securities, continuous unrealized loss position, less than 12 months, fair value	19,800,679	32,074,646
Securities, continuous unrealized loss position, less than 12 months, unrealized losses	(111,552)	(1,655,296)
Securities, continuous unrealized loss position, 12 months or more, fair value	35,152,236	9,685,143
Securities, continuous unrealized loss position, 12 months or more, unrealized losses	(1,021,504)	(509,946)
Securities, continuous unrealized loss position, fair value	54,952,914	41,759,789
Securities, continuous unrealized loss position, unrealized losses	$ (1,133,056)	$ (2,165,242)

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Note 8 - Disclosures about Fair Value of Assets and Liabilities (Details) - Fair Value of Financial Instruments (USD $)	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2013	Dec. 31, 2012
Financial assets:
Cash and cash equivalents	$ 20,831,026	$ 12,303,200	$ 23,855,188	$ 41,663,405
Held-to-maturity securities	69,862	79,162
Federal Home Loan Bank stock	2,878,900	2,885,100
Mortgage loans held for sale	1,221,633	623,432
Loans, net	454,151,996	464,379,854
Financial liabilities:
Deposits	481,152,569	487,318,939
Securities sold under agreements to repurchase	10,000,000	10,000,000
Subordinated debentures	15,465,000	15,465,000
Interest payable	239,297	250,361
Interest payable, fair value	239,297	250,361
Fair Value, Inputs, Level 1 [Member]
Financial assets:
Cash and cash equivalents	20,831,026	12,303,200
Cash and cash equivalents, fair value	20,831,026	12,303,200
Fair Value, Inputs, Level 2 [Member]
Financial assets:
Held-to-maturity securities	69,862	79,162
Held-to-maturity securities, fair value	71,628	81,089
Federal Home Loan Bank stock	2,878,900	2,885,100
Federal Home Loan Bank stock, fair value	2,878,900	2,885,100
Mortgage loans held for sale	1,221,633	623,432
Mortgage loans held for sale, fair value	1,221,633	623,432
Interest receivable	1,839,238	1,852,641
Interest receivable, fair value	1,839,238	1,852,641
Financial liabilities:
Deposits	481,152,569	487,318,939
Deposits, fair value	472,721,120	476,503,513
Federal Home Loan Bank advances	53,400,000	55,350,000
Federal Home Loan Bank advances, fair value	55,526,499	57,185,083
Securities sold under agreements to repurchase	10,000,000	10,000,000
Securities sold under agreements to repurchase, fair value	10,529,097	7,978,555
Interest payable	239,297	250,361
Interest payable, fair value	239,297	250,361
Fair Value, Inputs, Level 3 [Member]
Financial assets:
Loans, net	454,151,996	464,379,854
Loans, net, fair value	456,076,651	466,057,001
Financial liabilities:
Subordinated debentures	15,465,000	15,465,000
Subordinated debentures, fair value	$ 15,465,000	$ 15,465,000

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Note 4 - Loans and Allowance for Loan Losses (Details) - Loans by Category (USD $)	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	$ 461,115,778		$ 472,356,822
Allowance for loan losses	(6,788,409)	(7,761,000)	(7,801,600)	(8,377,000)	(8,112,000)	(8,740,000)
Deferred loan fees/costs, net	(175,373)		(175,368)
Net loans	454,151,996		464,379,854
One to Four Family Units [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	95,356,636		93,797,650
Multi-Family Units [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	31,969,145		46,188,434
Real Estate Construction [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	39,159,239		43,266,130
Real Estate Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	188,307,781		179,079,433
Commercial Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	89,248,153		92,721,783
Consumer and Other Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	$ 17,074,824		$ 17,303,392

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Note 4 - Loans and Allowance for Loan Losses (Details) - Loans by Aging (USD $)	Jun. 30, 2014	Dec. 31, 2013
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans receivable, 30-59 days past due	$ 17,000	$ 265,000
Loans receivable, 60-89 days past due	1,718,000	339,000
Loans receivable, 90 days and more past due	287,000	6,831,000
Loans receivable, past due	2,022,000	7,435,000
Loans receivable, current	459,094,000	464,922,000
Loans receivable	461,115,778	472,356,822
One to Four Family Units [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans receivable, 30-59 days past due	14,000	246,000
Loans receivable, 60-89 days past due	500,000	337,000
Loans receivable, 90 days and more past due	287,000
Loans receivable, past due	801,000	583,000
Loans receivable, current	94,556,000	93,215,000
Loans receivable	95,356,636	93,797,650
Multi-Family Units [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans receivable, current	31,969,000	46,188,000
Loans receivable	31,969,145	46,188,434
Real Estate Construction [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans receivable, 90 days and more past due		536,000
Loans receivable, past due		536,000
Loans receivable, current	39,159,000	42,730,000
Loans receivable	39,159,239	43,266,130
Real Estate Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans receivable, 60-89 days past due	28,000
Loans receivable, 90 days and more past due		2,604,000
Loans receivable, past due	28,000	2,604,000
Loans receivable, current	188,280,000	176,476,000
Loans receivable	188,307,781	179,079,433
Commercial Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans receivable, 60-89 days past due	1,152,000	2,000
Loans receivable, 90 days and more past due		3,628,000
Loans receivable, past due	1,152,000	3,630,000
Loans receivable, current	88,096,000	89,092,000
Loans receivable	89,248,153	92,721,783
Consumer and Other Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans receivable, 30-59 days past due	3,000	19,000
Loans receivable, 60-89 days past due	38,000
Loans receivable, 90 days and more past due		63,000
Loans receivable, past due	41,000	82,000
Loans receivable, current	17,034,000	17,221,000
Loans receivable	$ 17,074,824	$ 17,303,392

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 2,640,109	$ 2,520,393
Items not requiring (providing) cash:
Deferred income taxes	254,961	675,633
Depreciation	382,086	414,885
Provision for loan losses	525,000	650,000
Gain on sale of loans and investment securities	(446,936)	(1,229,002)
Loss on foreclosed assets held for sale	25,593	76,448
Gain on sale of state low-income housing tax credits		(1,441,012)
Amortization of deferred income, premiums and discounts	313,135	274,385
Stock award plan expense	190,490	187,275
Origination of loans held for sale	(14,709,615)	(31,553,697)
Proceeds from sale of loans held for sale	14,547,659	34,000,714
Increase in cash surrender value of bank owned life insurance	(184,969)	(194,895)
Changes in:
Prepaid FDIC deposit insurance premiums		1,438,636
Accrued interest receivable	13,403	51,533
Prepaid expenses and other assets	503,666	295,071
Accounts payable and accrued expenses	(103,039)	179,869
Income taxes receivable	(128,952)	77,283
Net cash provided by operating activities	3,822,591	6,423,519
CASH FLOWS FROM INVESTING ACTIVITIES
Net change in loans	9,451,794	5,081,769
Principal payments on held-to-maturity securities	9,300	91,829
Principal payments on available-for-sale securities	4,235,914	6,345,815
Proceeds from calls/maturities of available-for-sale securities	3,151,000	9,000,000
Purchase of premises and equipment	(229,092)	(272,671)
Purchase of available-for-sale securities	(25,995,159)	(44,309,342)
Proceeds from sale of available-for-sale securities	18,106,890	17,311,228
Redemption of Federal Home Loan Bank stock	6,200	658,100
Proceeds from sale of state low-income housing tax credits		1,441,012
Proceeds from sale of foreclosed assets held for sale	403,046	828,401
Net cash provided by (used in) investing activities	9,139,893	(3,823,859)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in demand deposits, NOW and savings accounts	(4,450,772)	25,921,950
Net decrease in certificates of deposit	(1,715,598)	(14,047,207)
Net decrease of securities sold under agreements to repurchase		(15,000,000)
Proceeds from FHLB advances	1,050,000
Repayments of FHLB advances	(3,000,000)	(15,100,000)
Stock options exercised	84,806	9,409
Redemption of preferred stock	(12,000,000)
Repurchase of common stock warrants		(2,003,250)
Proceeds from issuance of common stock	15,814,312
Advances from borrowers for taxes and insurance	195,594	217,003
Cash dividends paid on preferred stock	(413,000)	(300,000)
Treasury stock purchased		(105,782)
Net cash used in financing activities	(4,434,658)	(20,407,877)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	8,527,826	(17,808,217)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	12,303,200	41,663,405
CASH AND CASH EQUIVALENTS, END OF PERIOD	$ 20,831,026	$ 23,855,188

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Note 4 - Loans and Allowance for Loan Losses (Details) - Nonaccruing Loans (USD $)	Jun. 30, 2014	Dec. 31, 2013
Note 4 - Loans and Allowance for Loan Losses (Details) - Nonaccruing Loans [Line Items]
Nonaccruing loans	$ 7,806,316	$ 15,847,579
One to Four Family Units [Member]
Note 4 - Loans and Allowance for Loan Losses (Details) - Nonaccruing Loans [Line Items]
Nonaccruing loans	1,209,618	815,746
Real Estate Construction [Member]
Note 4 - Loans and Allowance for Loan Losses (Details) - Nonaccruing Loans [Line Items]
Nonaccruing loans	3,430,492	4,529,410
Real Estate Commercial [Member]
Note 4 - Loans and Allowance for Loan Losses (Details) - Nonaccruing Loans [Line Items]
Nonaccruing loans	514,866	3,663,166
Commercial Loans [Member]
Note 4 - Loans and Allowance for Loan Losses (Details) - Nonaccruing Loans [Line Items]
Nonaccruing loans	2,651,340	6,776,230
Consumer and Other Loans [Member]
Note 4 - Loans and Allowance for Loan Losses (Details) - Nonaccruing Loans [Line Items]
Nonaccruing loans		$ 63,027

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Note 6 - Income Per Common Share (Details) - Income Per Share (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Income Per Share [Abstract]
Basic Income Per Common Share (in Dollars)	$ 1,227,683	$ 1,369,110	$ 2,282,899	$ 2,123,133
Basic Income Per Common Share	4,265,050	2,731,727	3,718,791	2,735,533
Basic Income Per Common Share (in Dollars per share)	$ 0.29	$ 0.50	$ 0.61	$ 0.78
Effect of Dilutive Securities	72,430	75,197	72,988	72,214
Diluted Income Per Common Share (in Dollars)	$ 1,227,683	$ 1,369,110	$ 2,282,899	$ 2,123,133
Diluted Income Per Common Share	4,337,480	2,806,924	3,791,779	2,807,747
Diluted Income Per Common Share (in Dollars per share)	$ 0.28	$ 0.49	$ 0.60	$ 0.76

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Condensed Consolidated Balance Sheets (Unaudited) (USD $)	Jun. 30, 2014	Dec. 31, 2013
ASSETS
Cash	$ 4,449,140	$ 3,453,032
Interest-bearing deposits in other financial institutions	16,381,886	8,850,168
Cash and cash equivalents	20,831,026	12,303,200
Available-for-sale securities	100,414,541	97,692,685
Held-to-maturity securities	69,862	79,162
Stock in Federal Home Loan Bank, at cost	2,878,900	2,885,100
Mortgage loans held for sale	1,221,633	623,432
Loans receivable, net of allowance for loan losses of June 30, 2014 - $6,788,409 - December 31, 2013 - $7,801,600	454,151,996	464,379,854
Accrued interest receivable:
Loans	1,474,218	1,462,881
Investments and interest-bearing deposits	365,020	389,760
Prepaid expenses and other assets	5,033,213	5,536,879
Foreclosed assets held for sale	3,644,396	3,821,976
Premises and equipment, net	10,733,726	10,886,720
Bank owned life insurance	14,228,666	14,043,697
Income taxes receivable	615,777	504,138
Deferred income taxes	4,090,202	5,278,651
	619,753,176	619,888,135
LIABILITIES
Deposits	481,152,569	487,318,939
Federal Home Loan Bank and Federal Reserve Bank advances	53,400,000	55,350,000
Securities sold under agreements to repurchase	10,000,000	10,000,000
Subordinated debentures	15,465,000	15,465,000
Advances from borrowers for taxes and insurance	345,262	149,668
Accrued expenses and other liabilities	1,047,288	998,934
Accrued interest payable	239,297	250,361
	561,649,416	569,532,902
COMMITMENTS AND CONTINGENCIES
Capital Stock:
Series A preferred stock, $0.01 par value; authorized 2,000,000 shares; issued and outstanding December 31, 2013 - 12,000 shares		11,983,790
Common stock, $0.10 par value; authorized 10,000,000 shares; issued June 30, 2014 and December 31, 2013 - 6,799,903 and 6,783,603 shares, respectively	679,990	678,360
Additional paid-in capital	50,672,475	57,655,031
Retained earnings, substantially restricted	45,840,055	43,769,485
Accumulated other comprehensive income (loss)
Unrealized gain (loss) on available-for-sale securities, net of income taxes	(916,796)	(2,506,248)
	96,275,724	111,580,418
Treasury stock, at cost; June 30, 2014 and December 31, 2013 - 2,525,555 and 4,051,248 shares, respectively	(38,171,964)	(61,225,185)
	58,103,760	50,355,233
	$ 619,753,176	$ 619,888,135

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Note 9 - Preferred Stock and Common Stock Warrants (Details) (USD $)	0 Months Ended			1 Months Ended	6 Months Ended					0 Months Ended	1 Months Ended		0 Months Ended
	Mar. 07, 2014	May 15, 2013	Jun. 13, 2012	Jan. 30, 2009	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013	May 08, 2013	Apr. 15, 2013	Apr. 03, 2014 Series A Preferred Stock [Member]	Jan. 30, 2009 Series A Preferred Stock [Member]	Mar. 07, 2014 Series A Preferred Stock [Member]	Mar. 07, 2014 Underwritten Offering [Member] Common Stock [Member]	Mar. 07, 2014 Underwritten Offering [Member]	Mar. 07, 2014 Over-Allotment Option [Member] Common Stock [Member]
Note 9 - Preferred Stock and Common Stock Warrants (Details) [Line Items]
Stock Issued During Period, Shares, New Issues (in Shares)											17,000		1,499,999		195,652
Warrant Term				10 years
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in Shares)				459,459
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share)				$ 5.55
Stock and Warrants Issued During Period, Value, Preferred Stock and Warrants				$ 17,000,000
Preferred Stock, Redemption Amount			5,000,000
Preferred Stock, Amount of Preferred Dividends in Arrears			19,444
Treasury Stock, Value					38,171,964		61,225,185		12,000
Warrants and Rights Outstanding								2,003,250
Payments for Repurchase of Warrants		2,003,250				2,003,250
Stock Redeemed or Called During Period, Value					12,000,000					12,000,000
Preferred Stock, Dividend Rate, Percentage										9.00%
Proceeds from Issuance of Common Stock	$ 15,800,000				$ 15,814,312									$ 17,200,000
Share Price (in Dollars per share)															$ 11.50
Treasury Stock, Shares (in Shares)					2,525,555		4,051,248					12,000

XML

Condensed Consolidated Statement of Stockholders' Equity (Unaudited) (USD $)	Preferred Stock [Member]	Common Stock [Member]	Common Stock Warrants [Member]	Additional Paid-in Capital [Member]	Treasury Stock [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Total
Balance at Dec. 31, 2012	$ 11,789,276	$ 678,180	$ 1,377,811	$ 58,267,529	$ (61,369,344)	$ 39,324,292	$ 800,826	$ 50,868,570
Net income						2,520,393		2,520,393
Change in unrealized gain (loss) on available-for-sale securities, net of income taxes							(2,715,164)	(2,715,164)
Preferred stock discount accretion	97,257					(97,257)
Preferred stock dividends						(300,000)		(300,000)
Common stock warrants repurchased			(1,377,811)	(625,439)				(2,003,250)
Stock award plans				(63,520)	250,795			187,275
Stock options exercised		180		9,229				9,409
Treasury stock purchased					(105,782)			(105,782)
Balance at Jun. 30, 2013	11,886,533	678,360		57,587,799	(61,224,331)	41,447,428	(1,914,338)	48,461,451
Balance at Dec. 31, 2013	11,983,790	678,360		57,655,031	(61,225,185)	43,769,485	(2,506,248)	50,355,233
Net income						2,640,109		2,640,109
Change in unrealized gain (loss) on available-for-sale securities, net of income taxes							1,589,452	1,589,452
Preferred stock redeemed	(12,000,000)							(12,000,000)
Preferred stock discount accretion	16,210					(16,210)
Preferred stock dividends						(338,000)		(338,000)
Dividends on common stock ($0.05 per share)						(215,329)		(215,329)
Stock award plans				(215,059)	388,236			173,177
Stock options exercised		1,630		83,176				84,806
Proceeds from issuance of common stock				(6,850,673)	22,664,985			15,814,312
Balance at Jun. 30, 2014		$ 679,990		$ 50,672,475	$ (38,171,964)	$ 45,840,055	$ (916,796)	$ 58,103,760

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Note 4 - Loans and Allowance for Loan Losses (Details) - Troubled Debt Restructurings (USD $)	3 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Combination [Member] | One to Four Family Units [Member]
Real estate - residential mortgage:
Troubled debt restructurings, post-modification balance	$ 287,500
Combination [Member] | Consumer and Other Loans [Member]
Real estate - residential mortgage:
Troubled debt restructurings, post-modification balance	287,500
One to Four Family Units [Member]
Real estate - residential mortgage:
Troubled debt restructurings, number of loans	1
Troubled debt restructurings, pre-modification balance	287,500
Troubled debt restructurings, post-modification balance	287,500
Troubled debt restructurings, carrying balance	790,476	519,718
Real Estate Construction [Member]
Real estate - residential mortgage:
Troubled debt restructurings, carrying balance	3,411,014	4,507,190
Real Estate Commercial [Member]
Real estate - residential mortgage:
Troubled debt restructurings, carrying balance	486,612	3,026,931
Commercial Loans [Member]
Real estate - residential mortgage:
Troubled debt restructurings, carrying balance	2,285,821	3,699,243
Consumer and Other Loans [Member]
Real estate - residential mortgage:
Troubled debt restructurings, number of loans	1
Troubled debt restructurings, pre-modification balance	287,500
Troubled debt restructurings, post-modification balance	287,500
Troubled debt restructurings, carrying balance	$ 6,973,923	$ 11,753,082

XML

Note 8 - Disclosures about Fair Value of Assets and Liabilities (Tables)

6 Months Ended

Jun. 30, 2014

Fair Value Disclosures [Abstract]

Fair Value, Assets Measured on Recurring Basis [Table Text Block]

June 30, 2014
Financial assets:
	Level 1 inputs		Level 2 inputs		Level 3 inputs		Total fair value
Equity securities	$	106	$	-	$	-	$	106
Debt securities:
U.S. government agencies		-		17,337		-		17,337
Municipals		-		14,283		-		14,283
Government sponsored mortgage-backed securities		-		68,689		-		68,689
Available-for-sale securities	$	106	$	100,309	$	-	$	100,415

December 31, 2013
Financial assets:
	Level 1 inputs		Level 2 inputs		Level 3 inputs		Total fair value
Equity securities	$	99	$	-	$	-	$	99
Debt securities:
U.S. government agencies		-		31,762		-		31,762
Municipals		-		13,493		-		13,493
Corporate Bonds		-		994		-		994
Government sponsored mortgage-backed securities		-		51,345		-		51,345
Available-for-sale securities	$	99	$	97,594	$	-	$	97,693

Fair Value Measurements, Nonrecurring [Table Text Block]

Impaired loans:
	Level 1 inputs		Level 2 inputs		Level 3 inputs		Total fair value
June 30, 2014	$	-	$	-	$	7,069	$	7,069
December 31, 2013	$	-	$	-	$	10,305	$	10,305

Foreclosed assets held for sale:
	Level 1 inputs		Level 2 inputs		Level 3 inputs		Total fair value
June 30, 2014	$	-	$	-	$	-	$	-
December 31, 2013	$	-	$	-	$	2,340	$	2,340

Fair Value Inputs, Assets, Quantitative Information [Table Text Block]

	Fair Value June 30, 2014		Valuation Technique	Unobservable Input	Range (Weighted Average)
Impaired loans (collateral dependent)	$	7,069	Market Comparable	Discount to reflect realizable value		0%-38	%	(12%)
Impaired loans	$	-	Discounted cash flow	Discount rate		0	%
Foreclosed assets held for sale	$	-	Market Comparable	Discount to reflect realizable value		0	%

Fair Value, by Balance Sheet Grouping [Table Text Block]

	June 30, 2014
	Carrying Amount		Fair Value		Hierarchy Level
Financial assets:
Cash and cash equivalents	$	20,831,026	$	20,831,026		1
Held-to-maturity securities		69,862		71,628		2
Federal Home Loan Bank stock		2,878,900		2,878,900		2
Mortgage loans held for sale		1,221,633		1,221,633		2
Loans, net		454,151,996		456,076,651		3
Interest receivable		1,839,238		1,839,238		2
Financial liabilities:
Deposits		481,152,569		472,721,120		2
Federal Home Loan Bank advances		53,400,000		55,526,499		2
Securities sold under agreements to repurchase		10,000,000		10,529,097		2
Subordinated debentures		15,465,000		15,465,000		3
Interest payable		239,297		239,297		2
Unrecognized financial instruments (net of contractual value):
Commitments to extend credit		-		-		-
Unused lines of credit		-		-		-

	December 31, 2013
	Carrying Amount		Fair Value		Hierarchy Level
Financial assets:
Cash and cash equivalents	$	12,303,200	$	12,303,200		1
Held-to-maturity securities		79,162		81,089		2
Federal Home Loan Bank stock		2,885,100		2,885,100		2
Mortgage loans held for sale		623,432		623,432		2
Loans, net		464,379,854		466,057,001		3
Interest receivable		1,852,641		1,852,641		2
Financial liabilities:
Deposits		487,318,939		476,503,513		2
Federal Home Loan Bank advances		55,350,000		57,185,083		2
Securities sold under agreements to repurchase		10,000,000		7,978,555		2
Subordinated debentures		15,465,000		15,465,000		3
Interest payable		250,361		250,361		2
Unrecognized financial instruments (net of contractual value):
Commitments to extend credit		-		-		-
Unused lines of credit		-		-		-

XML

Note 4 - Loans and Allowance for Loan Losses (Details) - Loan Portfolio by Credit Quality (USD $)	Jun. 30, 2014	Dec. 31, 2013
Rating:
Loans receivable	$ 461,115,778	$ 472,356,822
Real Estate Construction [Member] | Pass [Member]
Rating:
Loans receivable	28,105,000	31,433,000
Real Estate Construction [Member] | Special Mention [Member]
Rating:
Loans receivable	7,585,000	7,253,000
Real Estate Construction [Member] | Substandard [Member]
Rating:
Loans receivable	3,469,000	683,000
Real Estate Construction [Member] | Doubtful [Member]
Rating:
Loans receivable		3,897,000
Real Estate Construction [Member]
Rating:
Loans receivable	39,159,239	43,266,130
Real Estate Commercial [Member] | Pass [Member]
Rating:
Loans receivable	180,408,000	169,135,000
Real Estate Commercial [Member] | Special Mention [Member]
Rating:
Loans receivable	3,874,000	4,721,000
Real Estate Commercial [Member] | Substandard [Member]
Rating:
Loans receivable	3,539,000	5,224,000
Real Estate Commercial [Member] | Doubtful [Member]
Rating:
Loans receivable	487,000
Real Estate Commercial [Member]
Rating:
Loans receivable	188,307,781	179,079,433
One to Four Family Units [Member] | Pass [Member]
Rating:
Loans receivable	88,541,000	83,341,000
One to Four Family Units [Member] | Special Mention [Member]
Rating:
Loans receivable	5,103,000	8,954,000
One to Four Family Units [Member] | Substandard [Member]
Rating:
Loans receivable	1,713,000	1,503,000
One to Four Family Units [Member]
Rating:
Loans receivable	95,356,636	93,797,650
Multi-Family Units [Member] | Pass [Member]
Rating:
Loans receivable	31,554,000	45,768,000
Multi-Family Units [Member] | Special Mention [Member]
Rating:
Loans receivable		420,000
Multi-Family Units [Member] | Substandard [Member]
Rating:
Loans receivable	415,000
Multi-Family Units [Member]
Rating:
Loans receivable	31,969,145	46,188,434
Commercial Loans [Member] | Pass [Member]
Rating:
Loans receivable	71,914,000	78,622,000
Commercial Loans [Member] | Special Mention [Member]
Rating:
Loans receivable	14,487,000	9,161,000
Commercial Loans [Member] | Substandard [Member]
Rating:
Loans receivable	2,847,000	2,738,000
Commercial Loans [Member] | Doubtful [Member]
Rating:
Loans receivable		2,201,000
Commercial Loans [Member]
Rating:
Loans receivable	89,248,153	92,721,783
Consumer and Other Loans [Member] | Pass [Member]
Rating:
Loans receivable	16,872,000	16,743,000
Consumer and Other Loans [Member] | Special Mention [Member]
Rating:
Loans receivable		107,000
Consumer and Other Loans [Member] | Substandard [Member]
Rating:
Loans receivable	203,000	453,000
Consumer and Other Loans [Member]
Rating:
Loans receivable	17,074,824	17,303,392
Pass [Member]
Rating:
Loans receivable	417,394,000	425,042,000
Special Mention [Member]
Rating:
Loans receivable	31,049,000	30,616,000
Substandard [Member]
Rating:
Loans receivable	12,186,000	10,601,000
Doubtful [Member]
Rating:
Loans receivable	$ 487,000	$ 6,098,000

XML

Note 3 - Securities (Details) - Available-for-sale Securities (USD $)	Jun. 30, 2014	Dec. 31, 2013
Note 3 - Securities (Details) - Available-for-sale Securities [Line Items]
Available-for-sale securities, amortized cost	$ 101,869,774	$ 101,670,858
Available-for-sale securities, gross unrealized (losses)	(1,879,821)	(4,281,654)
Available-for-sale securities	100,414,541	97,692,685
Available-for-sale securities, gross unrealized gains	424,588	303,481
Equity Securities [Member]
Note 3 - Securities (Details) - Available-for-sale Securities [Line Items]
Available-for-sale securities, amortized cost	102,212	102,212
Available-for-sale securities, gross unrealized (losses)	(14,468)	(18,913)
Available-for-sale securities	106,014	99,306
Available-for-sale securities, gross unrealized gains	18,270	16,007
US Government Agencies Debt Securities [Member]
Note 3 - Securities (Details) - Available-for-sale Securities [Line Items]
Available-for-sale securities, amortized cost	17,859,155	33,198,865
Available-for-sale securities, gross unrealized (losses)	(521,929)	(1,437,478)
Available-for-sale securities	17,337,226	31,761,387
US States and Political Subdivisions Debt Securities [Member]
Note 3 - Securities (Details) - Available-for-sale Securities [Line Items]
Available-for-sale securities, amortized cost	14,390,096	14,133,821
Available-for-sale securities, gross unrealized (losses)	(210,367)	(660,021)
Available-for-sale securities	14,282,780	13,492,627
Available-for-sale securities, gross unrealized gains	103,051	18,827
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Note 3 - Securities (Details) - Available-for-sale Securities [Line Items]
Available-for-sale securities, amortized cost	69,518,311	53,245,297
Available-for-sale securities, gross unrealized (losses)	(1,133,057)	(2,165,242)
Available-for-sale securities	68,688,521	51,345,093
Available-for-sale securities, gross unrealized gains	303,267	265,038
Corporate Debt Securities [Member]
Note 3 - Securities (Details) - Available-for-sale Securities [Line Items]
Available-for-sale securities, amortized cost		990,663
Available-for-sale securities		994,272
Available-for-sale securities, gross unrealized gains		$ 3,609

XML

Condensed Consolidated Statement of Stockholders' Equity (Unaudited) (Parentheticals) (USD $)	6 Months Ended
	Jun. 30, 2014
Dividends on common stock per share	$ 0.05

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Loans receivable, allowance for loan losses (in Dollars)	$ 6,788,409	$ 7,801,600
Preferred stock, par value (in Dollars per share)	$ 0.01	$ 0.01
Preferred stock, authorized	2,000,000	2,000,000
Preferred stock, issued	12,000	12,000
Preferred stock, outstanding	12,000	12,000
Common stock, par value (in Dollars per share)	$ 0.10	$ 0.10
Common stock, authorized	10,000,000	10,000,000
Common stock, issued	6,799,903	6,783,603
Treasury stock, shares	2,525,555	4,051,248

XML

Note 9 - Preferred Stock and Common Stock Warrants

6 Months Ended

Jun. 30, 2014

Note 9 - Preferred Stock and Common Stock Warrants [Line Items]

Stockholders' Equity Note Disclosure [Text Block]

Note 9: Preferred Stock and Common Stock Warrants

On January 30, 2009, as part of the U.S. Department of the Treasury's Troubled Asset Relief Program's Capital Purchase Program (“CPP”), the Company entered into a Securities Purchase Agreement - Standard Terms with the United States Department of the Treasury (the "Treasury") pursuant to which the Company sold to the Treasury 17,000 shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series A (the "Series A Preferred Stock") and issued a ten year warrant (the "Warrant") to purchase 459,459 shares of the Company's common stock (the "Common Stock") for $5.55 per share for a total purchase price of $17.0 million.

On June 13, 2012, with regulatory approval, the Company redeemed $5 million of the Series A Preferred Stock, including accrued and unpaid dividends of $19,444.

The Company entered into a Placement Agency Agreement with the Treasury on April 15, 2013 in connection with a private auction by the Treasury of the remaining 12,000 shares of Series A Preferred Stock conducted immediately thereafter. On April 29, 2013, the Treasury settled the sale of such shares of Series A Preferred Stock to the winning bidders in the private auction, consisting of six parties unrelated to the Company.

On May 8, 2013, the Company notified the Treasury of its intent to repurchase the Warrant at its fair market value. The Board of Directors of the Company had previously determined that it would be in the best interest of the Company and its stockholders to repurchase the Warrant and determined the Warrant’s fair market value to be $2,003,250 (the “Fair Market Value”). On May 10, 2013, the Treasury notified the Company that it had accepted the Company’s offer to repurchase the Warrant at its Fair Market Value. Accordingly, on May 15, 2013, the Company entered into a Letter Agreement with Treasury pursuant to which the Company repurchased the Warrant for $2,003,250 in cash. As a result of the aforementioned, the Warrant is no longer issued or outstanding and the Company’s participation in the CPP is completed. In addition, as a result of the Treasury’s sale of the Series A Preferred stock to third-party investors on April 29, 2013, the Treasury no longer possessed any securities issued by the Company.

On April 3, 2014, the Company received approval from the Board of Governors of the Federal Reserve System to redeem the Company’s remaining $12 million of Series A Preferred Stock that carried a coupon rate of 9.0% per annum. The Company provided the holders of the Series A Preferred Stock with a formal notice of redemption and thirty days thereafter redeemed the Series A Preferred Stock on May 7, 2014, including all accrued and unpaid dividends.

Common Stock [Member]

Note 9 - Preferred Stock and Common Stock Warrants [Line Items]

Stockholders' Equity Note Disclosure [Text Block]

Note 10: Common Stock Offering

On March 7, 2014, the Company closed an underwritten offering of its common stock. The Company raised approximately $17.2 million in gross proceeds by re-issuing 1,499,999 shares of its Treasury Stock, which includes the full exercise of the over-allotment option granted to the underwriters of 195,652 shares, at a price to the public of $11.50 per share.

Net proceeds from the sale of the shares after underwriting discounts and estimated offering expenses were approximately $15.8 million. The Company used the net proceeds from the offering to redeem the remaining 12,000 shares of the Company’s Series A Preferred Stock on May 7, 2014 and intends to use the remaining net proceeds for working capital and for general corporate purposes, including potential future acquisitions.

XML

Document And Entity Information	6 Months Ended
	Jun. 30, 2014	Aug. 01, 2014
Document and Entity Information [Abstract]
Entity Registrant Name	GUARANTY FEDERAL BANCSHARES INC
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		4,274,348
Amendment Flag	false
Entity Central Index Key	0001046203
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Document Period End Date	Jun. 30, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q2

XML

Note 3 - Securities (Tables)

6 Months Ended

Jun. 30, 2014

Note 3 - Securities (Tables) [Line Items]

Schedule of Available-for-sale Securities Reconciliation [Table Text Block]

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Approximate Fair Value
As of June 30, 2014
Equity Securities	$	102,212	$	18,270	$	(14,468	)	$	106,014
Debt Securities:
U. S. government agencies		17,859,155		-		(521,929	)		17,337,226
Municipals		14,390,096		103,051		(210,367	)		14,282,780
Government sponsored mortgage-backed securities		69,518,311		303,267		(1,133,057	)		68,688,521
	$	101,869,774	$	424,588	$	(1,879,821	)	$	100,414,541

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Approximate Fair Value
As of December 31, 2013
Equity Securities	$	102,212	$	16,007	$	(18,913	)	$	99,306
Debt Securities:
U. S. government agencies		33,198,865		-		(1,437,478	)		31,761,387
Municipals		14,133,821		18,827		(660,021	)		13,492,627
Corporates		990,663		3,609		-			994,272
Government sponsored mortgage-backed securities		53,245,297		265,038		(2,165,242	)		51,345,093
	$	101,670,858	$	303,481	$	(4,281,654	)	$	97,692,685

Available-for-sale Securities [Table Text Block]

	Amortized Cost		Approximate Fair Value
1-5 years	$	9,514,806	$	9,337,173
6-10 years		14,984,811		14,576,895
After 10 years		7,749,634		7,705,938
Government sponsored mortgage-backed securities not due on a single maturity date		69,518,311		68,688,521
	$	101,767,562	$	100,308,527

Held-to-maturity Securities [Table Text Block]

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Approximate Fair Value
As of June 30, 2014
Debt Securities:
Government sponsored mortgage-backed securities	$	69,862	$	1,766	$	-	$	71,628

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Approximate Fair Value
As of December 31, 2013
Debt Securities:
Government sponsored mortgage-backed securities	$	79,162	$	1,927	$	-	$	81,089

Schedule of Unrealized Loss on Investments [Table Text Block]

	June 30, 2014
	Less than 12 Months					12 Months or More					Total
Description of Securities	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Equity Securities	$	-	$	-		$	33,459	$	(14,468	)	$	33,459	$	(14,468	)
U. S. government agencies		-		-			17,337,226		(521,929	)		17,337,226		(521,929	)
Municipals		2,729,915		(15,070	)		7,181,252		(195,297	)		9,911,167		(210,367	)
Government sponsored mortgage-backed securities		19,800,679		(111,552	)		35,152,236		(1,021,504	)		54,952,914		(1,133,056	)
	$	22,530,594	$	(126,622	)	$	59,704,173	$	(1,753,199	)	$	82,234,766	$	(1,879,821	)

	December 31, 2013
	Less than 12 Months					12 Months or More					Total
Description of Securities	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Equity Securities	$	-	$	-		$	29,014	$	(18,913	)	$	29,014	$	(18,913	)
U. S. government agencies		24,731,730		(916,208	)		7,029,657		(521,270	)		31,761,387		(1,437,478	)
Municipals		10,460,662		(534,440	)		1,701,215		(125,581	)		12,161,877		(660,021	)
Government sponsored mortgage-backed securities		32,074,646		(1,655,296	)		9,685,143		(509,946	)		41,759,789		(2,165,242	)
	$	67,267,038	$	(3,105,944	)	$	18,445,029	$	(1,175,710	)	$	85,712,067	$	(4,281,654	)

Held to Maturity Maturities [Member]

Note 3 - Securities (Tables) [Line Items]

Held-to-maturity Securities [Table Text Block]

	Amortized Cost		Approximate Fair Value
Government sponsored mortgage-backed securities not due on a single maturity date	$	69,862	$	71,628

XML

Condensed Consolidated Statements of Income (Unaudited) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Interest Income
Loans	$ 5,576,155	$ 5,952,456	$ 11,443,713	$ 11,880,846
Investment securities	415,318	466,828	872,884	899,457
Other	46,110	47,736	81,050	106,138
	6,037,583	6,467,020	12,397,647	12,886,441
Interest Expense
Deposits	562,700	731,420	1,169,493	1,492,594
Federal Home Loan Bank and Federal Reserve Bank advances	298,636	307,869	594,327	676,544
Subordinated debentures	133,035	134,322	266,198	268,672
Other	65,975	107,742	131,225	271,697
	1,060,346	1,281,353	2,161,243	2,709,507
Net Interest Income	4,977,237	5,185,667	10,236,404	10,176,934
Provision for Loan Losses	325,000	250,000	525,000	650,000
Net Interest Income After
Provision for Loan Losses	4,652,237	4,935,667	9,711,404	9,526,934
Noninterest Income
Service charges	318,434	292,049	631,419	553,834
Gain on sale of investment securities	7,603	116,182	10,691	204,983
Gain on sale of loans	250,667	592,086	436,245	1,024,019
Gain on sale of state low-income housing tax credits		1,441,012		1,441,012
Net loss on foreclosed assets	(61,182)	(75,758)	(76,965)	(148,103)
Other income	346,973	318,973	678,798	628,567
	862,495	2,684,544	1,680,188	3,704,312
Noninterest Expense
Salaries and employee benefits	2,231,963	2,272,746	4,536,731	4,665,108
Occupancy	419,614	449,764	846,675	875,893
FDIC deposit insurance premiums	120,029	141,173	256,963	283,636
Prepayment penalty on securities sold under agreements to repurchase		1,510,000		1,510,000
Data processing	165,486	184,875	326,272	354,135
Advertising	106,251	106,251	212,502	212,502
Other expense	839,640	867,528	2,048,444	2,056,663
	3,882,983	5,532,337	8,227,587	9,957,937
Income Before Income Taxes	1,631,749	2,087,874	3,164,005	3,273,309
Provision for Income Taxes	293,066	520,134	523,896	752,916
Net Income	1,338,683	1,567,740	2,640,109	2,520,393
Preferred Stock Dividends and Discount Accretion	111,000	198,630	357,210	397,260
Net Income Available to Common Shareholders	$ 1,227,683	$ 1,369,110	$ 2,282,899	$ 2,123,133
Basic Income Per Common Share (in Dollars per share)	$ 0.29	$ 0.50	$ 0.61	$ 0.78
Diluted Income Per Common Share (in Dollars per share)	$ 0.28	$ 0.49	$ 0.60	$ 0.76

XML

Note 4 - Loans and Allowance for Loan Losses

6 Months Ended

Jun. 30, 2014

Receivables [Abstract]

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

Note 4: Loans and Allowance for Loan Losses

Categories of loans at June 30, 2014 and December 31, 2013 include:

	June 30,			December 31,
	2014			2013
Real estate - residential mortgage:
One to four family units	$	95,356,636		$	93,797,650
Multi-family		31,969,145			46,188,434
Real estate - construction		39,159,239			43,266,130
Real estate - commercial		188,307,781			179,079,433
Commercial loans		89,248,153			92,721,783
Consumer and other loans		17,074,824			17,303,392
Total loans		461,115,778			472,356,822
Less:
Allowance for loan losses		(6,788,409	)		(7,801,600	)
Deferred loan fees/costs, net		(175,373	)		(175,368	)
Net loans	$	454,151,996		$	464,379,854

Classes of loans by aging at June 30, 2014 and December 31, 2013 were as follows:

As of June 30, 2014
	30-59 Days Past Due		60-89 Days Past Due		90 Days and more Past Due		Total Past Due		Current		Total Loans Receivable		Total Loans > 90 Days and Accruing
	(In Thousands)
Real estate - residential mortgage:
One to four family units	$	14	$	500	$	287	$	801	$	94,556	$	95,357	$	-
Multi-family		-		-		-		-		31,969		31,969		-
Real estate - construction		-		-		-		-		39,159		39,159		-
Real estate - commercial		-		28		-		28		188,280		188,308		-
Commercial loans		-		1,152		-		1,152		88,096		89,248		-
Consumer and other loans		3		38		-		41		17,034		17,075		-
Total	$	17	$	1,718	$	287	$	2,022	$	459,094	$	461,116	$	-

As of December 31, 2013
	30-59 Days Past Due		60-89 Days Past Due		90 Days and more Past Due		Total Past Due		Current		Total Loans Receivable		Total Loans > 90 Days and Accruing
	(In Thousands)
Real estate - residential mortgage:
One to four family units	$	246	$	337	$	-	$	583	$	93,215	$	93,798	$	-
Multi-family		-		-		-		-		46,188		46,188		-
Real estate - construction		-		-		536		536		42,730		43,266		-
Real estate - commercial		-		-		2,604		2,604		176,476		179,080		-
Commercial loans		-		2		3,628		3,630		89,092		92,722		-
Consumer and other loans		19		-		63		82		17,221		17,303		-
Total	$	265	$	339	$	6,831	$	7,435	$	464,922	$	472,357	$	-

Nonaccruing loans are summarized as follows:

	June 30,		December 31,
	2014		2013
Real estate - residential mortgage:
One to four family units	$	1,209,618	$	815,746
Multi-family		-		-
Real estate - construction		3,430,492		4,529,410
Real estate - commercial		514,866		3,663,166
Commercial loans		2,651,340		6,776,230
Consumer and other loans		-		63,027
Total	$	7,806,316	$	15,847,579

The following tables present the activity in the allowance for loan losses based on portfolio segment for the three and six months ended June 30, 2014 and 2013:

Three months ended June 30, 2014	Construction			Commercial Real Estate			One to four family			Multi-family			Commercial			Consumer and Other			Unallocated			Total
	(In Thousands)
Allowance for loan losses:
Balance, beginning of period	$	2,008		$	2,344		$	962		$	147		$	1,799		$	228		$	273		$	7,761
Provision charged to expense		76			(51	)		65			(1	)		477			32			(273	)	$	325
Losses charged off		(207	)		(9	)		(14	)		-			(1,058	)		(49	)		-		$	(1,337	)
Recoveries		2			-			1			-			26			10			-		$	39
Balance, end of period	$	1,879		$	2,284		$	1,014		$	146		$	1,244		$	221		$	-		$	6,788

Six months ended June 30, 2014	Construction			Commercial Real Estate			One to four family			Multi-family			Commercial			Consumer and Other			Unallocated			Total
	(In Thousands)
Allowance for loan losses:
Balance, beginning of period	$	2,387		$	2,059		$	997		$	209		$	1,519		$	272		$	359		$	7,802
Provision charged to expense		(304	)		234			114			(63	)		914			(11	)		(359	)	$	525
Losses charged off		(207	)		(9	)		(100	)		-			(1,222	)		(68	)		-		$	(1,606	)
Recoveries		3			-			3			-			33			28			-		$	67
Balance, end of period	$	1,879		$	2,284		$	1,014		$	146		$	1,244		$	221		$	-		$	6,788

Three months ended June 30, 2013	Construction			Commercial Real Estate		One to four family			Multi-family		Commercial		Consumer and Other			Unallocated			Total
	(In Thousands)
Allowance for loan losses:
Balance, beginning of period	$	2,253		$	1,911	$	1,234		$	285	$	1,460	$	275		$	694		$	8,112
Provision charged to expense		(282	)		115		66			6		542		(3	)		(194	)	$	250
Losses charged off		-			-		(74	)		-		-		(20	)		-		$	(94	)
Recoveries		28			-		3			-		63		15			-		$	109
Balance, end of period	$	1,999		$	2,026	$	1,229		$	291	$	2,065	$	267		$	500		$	8,377

Six months ended June 30, 2013	Construction			Commercial Real Estate			One to four family			Multi-family		Commercial			Consumer and Other			Unallocated		Total
	(In Thousands)
Allowance for loan losses:
Balance, beginning of period	$	2,525		$	2,517		$	1,316		$	284	$	1,689		$	255		$	154	$	8,740
Provision charged to expense		(126	)		(305	)		40			7		651			37			346	$	650
Losses charged off		(438	)		(186	)		(134	)		-		(373	)		(53	)		-	$	(1,184	)
Recoveries		38			-			7			-		98			28			-	$	171
Balance, end of period	$	1,999		$	2,026		$	1,229		$	291	$	2,065		$	267		$	500	$	8,377

The following tables present the recorded investment in loans based on portfolio segment and impairment method as of June 30, 2014 and December 31, 2013:

As of June 30, 2014

	Construction		Commercial Real Estate		One to four family		Multi-family		Commercial		Consumer and Other		Unallocated		Total
	(In Thousands)
Allowance for loan losses:
Ending balance: individually evaluated for impairment	$	515	$	185	$	48	$	-	$	-	$	10	$	-	$	758
Ending balance: collectively evaluated for impairment	$	1,364	$	2,099	$	966	$	146	$	1,244	$	211	$	-	$	6,030
Loans:
Ending balance: individually evaluated for impairment	$	3,430	$	515	$	1,210	$	-	$	3,438	$	273	$	-	$	8,866
Ending balance: collectively evaluated for impairment	$	35,729	$	187,793	$	94,147	$	31,969	$	85,810	$	16,802	$	-	$	452,250

December 31, 2013 

	Construction		Commercial Real Estate		One to four family		Multi-family		Commercial		Consumer and Other		Unallocated		Total
	(In Thousands)
Allowance for loan losses:
Ending balance: individually evaluated for impairment	$	890	$	-	$	8	$	-	$	601	$	102	$	-	$	1,601
Ending balance: collectively evaluated for impairment	$	1,497	$	2,059	$	989	$	209	$	918	$	170	$	359	$	6,201
Loans:
Ending balance: individually evaluated for impairment	$	4,530	$	3,663	$	886	$	-	$	6,776	$	316	$	-	$	16,171
Ending balance: collectively evaluated for impairment	$	38,736	$	175,417	$	92,912	$	46,188	$	85,946	$	16,987	$	-	$	456,186

The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to income. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance.

The allowance for loan losses is evaluated on a regular basis by management and is based upon management’s periodic review of the collectibility of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available.

The allowance consists of allocated and general components. The allocated component relates to loans that are classified as impaired. For those loans that are classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. The general component covers nonclassified loans and is based on historical charge-off experience and expected loss given default derived from the Bank’s internal risk rating process. Other adjustments may be made to the allowance for pools of loans after an assessment of internal or external influences on credit quality that are not fully reflected in the historical loss or risk rating data.

A loan is considered impaired when, based on current information and events, it is probable that the Bank will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price or the fair value of the collateral if the loan is collateral dependent.

Groups of loans with similar risk characteristics are collectively evaluated for impairment based on the group’s historical loss experience adjusted for changes in trends, conditions and other relevant factors that affect repayment of the loans.

The following table summarizes the recorded investment in impaired loans at June 30, 2014 and December 31, 2013:

	June 30, 2014						December 31, 2013
	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Recorded Balance		Unpaid Principal Balance		Specific Allowance
	(In Thousands)
Loans without a specific valuation allowance
Real estate - residential mortgage:
One to four family units	$	896	$	896	$	-	$	620	$	620	$	-
Multi-family		-		-		-		-		-		-
Real estate - construction		93		93		-		96		940		-
Real estate - commercial		28		37		-		3,663		3,663		-
Commercial loans		3,438		4,254		-		2,327		2,462		-
Consumer and other loans		-		-		-		-		-		-
Loans with a specific valuation allowance
Real estate - residential mortgage:
One to four family units	$	314	$	314	$	48	$	267	$	267	$	8
Multi-family		-		-		-		-		-		-
Real estate - construction		3,337		4,388		515		4,433		4,433		890
Real estate - commercial		487		487		185		-		-		-
Commercial loans		-		-		-		4,449		5,148		601
Consumer and other loans		273		273		10		316		316		102
Total
Real estate - residential mortgage:
One to four family units	$	1,210	$	1,210	$	48	$	887	$	887	$	8
Multi-family		-		-		-		-		-		-
Real estate - construction		3,430		4,481		515		4,529		5,373		890
Real estate - commercial		515		524		185		3,663		3,663		-
Commercial loans		3,438		4,254		-		6,776		7,610		601
Consumer and other loans		273		273		10		316		316		102
Total	$	8,866	$	10,742	$	758	$	16,171	$	17,849	$	1,601

The following table summarizes average impaired loans and related interest recognized on impaired loans for the three and six months ended June 30, 2014 and 2013:

	For the Three Months Ended				For the Three Months Ended
	June 30, 2014				June 30, 2013
	Average Investment in Impaired Loans		Interest Income Recognized		Average Investment in Impaired Loans		Interest Income Recognized
	(In Thousands)
Loans without a specific valuation allowance
Real estate - residential mortgage:
One to four family units	$	823	$	-	$	2,164	$	1
Multi-family		-		-		-		-
Real estate - construction		94		-		5,320		-
Real estate - commercial		264		-		5,095		13
Commercial loans		3,486		98		648		-
Consumer and other loans		-		-		96		-
Loans with a specific valuation allowance
Real estate - residential mortgage:
One to four family units	$	325	$	-	$	181	$	-
Multi-family		-		-		-		-
Real estate - construction		3,532		-		613		-
Real estate - commercial		574		-		-		-
Commercial loans		699		-		3,230		-
Consumer and other loans		272		-		305		-
Total
Real estate - residential mortgage:
One to four family units	$	1,148	$	-	$	2,345	$	1
Multi-family		-		-		-		-
Real estate - construction		3,626		-		5,933		-
Real estate - commercial		838		-		5,095		13
Commercial loans		4,185		98		3,878		-
Consumer and other loans		272		-		401		-
Total	$	10,069	$	98	$	17,652	$	14

	For the Six Months Ended				For the Six Months Ended
	June 30, 2014				June 30, 2013
	Average Investment in Impaired Loans		Interest Income Recognized		Average Investment in Impaired Loans		Interest Income Recognized
	(In Thousands)
Loans without a specific valuation allowance
Real estate - residential mortgage:
One to four family units	$	752	$	1	$	2,152	$	3
Multi-family		-		-		-		-
Real estate - construction		95		-		5,214		-
Real estate - commercial		408		-		4,142		36
Commercial loans		3,088		98		646		1
Consumer and other loans		-		-		99		-
Loans with a specific valuation allowance
Real estate - residential mortgage:
One to four family units	$	329	$	-	$	144	$	-
Multi-family		-		-		-		-
Real estate - construction		3,883		-		859		-
Real estate - commercial		412		-		1,122		-
Commercial loans		1,897		-		2,756		-
Consumer and other loans		375		-		339		-
Total
Real estate - residential mortgage:
One to four family units	$	1,081	$	1	$	2,296	$	3
Multi-family		-		-		-		-
Real estate - construction		3,978		-		6,073		-
Real estate - commercial		820		-		5,264		36
Commercial loans		4,985		98		3,402		1
Consumer and other loans		375		-		438		-
Total	$	11,239	$	99	$	17,473	$	40

At June 30, 2014, the Bank’s impaired loans shown in the table above included loans that were classified as troubled debt restructurings (“TDR”). The restructuring of a loan is considered a TDR if both (i) the borrower is experiencing financial difficulties and (ii) the creditor has granted a concession.

In assessing whether or not a borrower is experiencing financial difficulties, the Bank considers information currently available regarding the financial condition of the borrower. This information includes, but is not limited to, whether (i) the debtor is currently in payment default on any of its debt; (ii) a payment default is probable in the foreseeable future without the modification; (iii) the debtor has declared or is in the process of declaring bankruptcy and (iv) the debtor’s projected cash flow is sufficient to satisfy the contractual payments due under the original terms of the loan without a modification.

The Bank considers all aspects of the modification to loan terms to determine whether or not a concession has been granted to the borrower. Key factors considered by the Bank include the debtor’s ability to access funds at a market rate for debt with similar risk characteristics, the significance of the modification relative to unpaid principal balance or collateral value of the debt, and the significance of a delay in the timing of payments relative to the original contractual terms of the loan. The most common concessions granted by the Bank generally include one or more modifications to the terms of the debt, such as (i) a reduction in the interest rate for the remaining life of the debt, (ii) an extension of the maturity date at an interest rate lower than the current market rate for new debt with similar risk, (iii) a reduction on the face amount or maturity amount of the debt as stated in the original loan, (iv) a temporary period of interest-only payments, (v) a reduction in accrued interest, and (vi) an extension of amortization.

The following table summarizes, by class, loans that were newly classified as TDRs for the three months ended June 30, 2014:

	Number of Loans		Pre-Modification Outstanding Recorded Balance		Post-Modification Outstanding Recorded Balance
Real estate - residential mortgage:
One to four family units		1	$	287,500	$	287,500
Multi-family		-		-		-
Real estate - construction		-		-		-
Real estate - commercial		-		-		-
Commercial loans		-		-		-
Consumer and other loans		-		-		-
Total		1	$	287,500	$	287,500

The following table summarizes, by type of concession, loans that were newly classified as TDRs for the three months ended June 30, 2014:

	Interest Rate		Term		Combination		Total Modification
Real estate - residential mortgage:
One to four family units	$	-	$	-	$	287,500	$	287,500
Multi-family		-		-		-		-
Real estate - construction		-		-		-		-
Real estate - commercial		-		-		-		-
Commercial loans		-		-		-		-
Consumer and other loans		-		-		-		-
Total	$	-	$	-	$	287,500	$	287,500

The following table presents the carrying balance of TDRs as of June 30, 2014 and December 31, 2013:

	June 30,		December 31,
	2014		2013
Real estate - residential mortgage:
One to four family units	$	790,476	$	519,718
Multi-family		-		-
Real estate - construction		3,411,014		4,507,190
Real estate - commercial		486,612		3,026,931
Commercial loans		2,285,821		3,699,243
Consumer and other loans		-		-
Total	$	6,973,923	$	11,753,082

The Bank has allocated $742,651 and $1,146,359 of specific reserves to customers whose loan terms have been modified in a TDR as of June 30, 2014 and December 31, 2013, respectively.

There was one commercial TDR totaling $391,364 for which there was a payment default within twelve months following the modification during the three months ending June 30, 2014. There were two one to four family TDRs totaling $330,000 for which there was a payment default within twelve months following the modification during the three months ending June 30, 2013. A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms.

As part of the on-going monitoring of the credit quality of the Bank’s loan portfolio, management tracks loans by an internal rating system. All loans are assigned an internal credit quality rating based on an analysis of the borrower’s financial condition. The criteria used to assign quality ratings to extensions of credit that exhibit potential problems or well-defined weaknesses are primarily based upon the degree of risk and the likelihood of orderly repayment, and their effect on the Bank’s safety and soundness. The following are the internally assigned ratings:

Pass: This rating represents loans that have strong asset quality and liquidity along with a multi-year track record of profitability.

Special mention: This rating represents loans that are currently protected but are potentially weak. The credit risk may be relatively minor, yet constitute an increased risk in light of the circumstances surrounding a specific loan.

Substandard: This rating represents loans that show signs of continuing negative financial trends and unprofitability and therefore, is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any.

Doubtful: This rating represents loans that have all the weaknesses of substandard classified loans with the additional characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.

Risk characteristics applicable to each segment of the loan portfolio are described as follows.

Real estate-Residential 1-4 family: The residential 1-4 family real estate loans are generally secured by owner-occupied 1-4 family residences. Repayment of these loans is primarily dependent on the personal income and credit rating of the borrowers. Credit risk in these loans can be impacted by economic conditions within the Bank’s market areas that might impact either property values or a borrower’s personal income. Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of borrowers.

Real estate-Construction: Construction and land development real estate loans are usually based upon estimates of costs and estimated value of the completed project and include independent appraisal reviews and a financial analysis of the developers and property owners. Sources of repayment of these loans may include permanent loans, sales of developed property or an interim loan commitment from the Bank until permanent financing is obtained. These loans are considered to be higher risk than other real estate loans due to their ultimate repayment being sensitive to interest rate changes, general economic conditions and the availability of long-term financing. Credit risk in these loans may be impacted by the creditworthiness of a borrower, property values and the local economies in the Bank’s market areas.

Real estate-Commercial: Commercial real estate loans typically involve larger principal amounts, and repayment of these loans is generally dependent on the successful operations of the property securing the loan or the business conducted on the property securing the loan. These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Credit risk in these loans may be impacted by the creditworthiness of a borrower, property values and the local economies in the Bank’s market areas.

Commercial: The commercial portfolio includes loans to commercial customers for use in financing working capital needs, equipment purchases and expansions. The loans in this category are repaid primarily from the cash flow of a borrower’s principal business operation. Credit risk in these loans is driven by creditworthiness of a borrower and the economic conditions that impact the cash flow stability from business operations.

Consumer: The consumer loan portfolio consists of various term and line of credit loans such as automobile loans and loans for other personal purposes. Repayment for these types of loans will come from a borrower’s income sources that are typically independent of the loan purpose. Credit risk is driven by consumer economic factors (such as unemployment and general economic conditions in the Bank’s market area) and the creditworthiness of a borrower.

The following tables provide information about the credit quality of the loan portfolio using the Bank’s internal rating system as of June 30, 2014 and December 31, 2013:

June 30, 2014

	Construction		Commercial Real Estate		One to four family		Multi-family		Commercial		Consumer and Other		Total
	(In Thousands)
Rating:
Pass	$	28,105	$	180,408	$	88,541	$	31,554	$	71,914	$	16,872	$	417,394
Special Mention		7,585		3,874		5,103		-		14,487		-		31,049
Substandard		3,469		3,539		1,713		415		2,847		203		12,186
Doubtful		-		487		-		-		-		-		487
Total	$	39,159	$	188,308	$	95,357	$	31,969	$	89,248	$	17,075	$	461,116

December 31, 2013 

	Construction		Commercial Real Estate		One to four family		Multi-family		Commercial		Consumer and Other		Total
	(In Thousands)
Rating:
Pass	$	31,433	$	169,135	$	83,341	$	45,768	$	78,622	$	16,743	$	425,042
Special Mention		7,253		4,721		8,954		420		9,161		107		30,616
Substandard		683		5,224		1,503		-		2,738		453		10,601
Doubtful		3,897		-		-		-		2,201		-		6,098
Total	$	43,266	$	179,080	$	93,798	$	46,188	$	92,722	$	17,303	$	472,357

For loans amortized at cost, interest income is accrued based on the unpaid principal balance. Loan origination fees net of certain direct origination costs, are deferred and amortized as a level yield adjustment over the respective term of the loan.

The accrual of interest on loans is discontinued at the time the loan is 90 days past due unless the loan is well-secured and in process of collection. Past due status is based on contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged off at an earlier date if collection of principal or interest is considered doubtful.

All interest accrued but not collected for loans that are placed on nonaccrual or charged off is reversed against interest income. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

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Note 3 - Securities

6 Months Ended

Jun. 30, 2014

Investments, Debt and Equity Securities [Abstract]

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

Note 3: Securities

The amortized cost and approximate fair values of securities classified as available-for-sale were as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Approximate Fair Value
As of June 30, 2014
Equity Securities	$	102,212	$	18,270	$	(14,468	)	$	106,014
Debt Securities:
U. S. government agencies		17,859,155		-		(521,929	)		17,337,226
Municipals		14,390,096		103,051		(210,367	)		14,282,780
Government sponsored mortgage-backed securities		69,518,311		303,267		(1,133,057	)		68,688,521
	$	101,869,774	$	424,588	$	(1,879,821	)	$	100,414,541

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Approximate Fair Value
As of December 31, 2013
Equity Securities	$	102,212	$	16,007	$	(18,913	)	$	99,306
Debt Securities:
U. S. government agencies		33,198,865		-		(1,437,478	)		31,761,387
Municipals		14,133,821		18,827		(660,021	)		13,492,627
Corporates		990,663		3,609		-			994,272
Government sponsored mortgage-backed securities		53,245,297		265,038		(2,165,242	)		51,345,093
	$	101,670,858	$	303,481	$	(4,281,654	)	$	97,692,685

Maturities of available-for-sale debt securities as of June 30, 2014:

	Amortized Cost		Approximate Fair Value
1-5 years	$	9,514,806	$	9,337,173
6-10 years		14,984,811		14,576,895
After 10 years		7,749,634		7,705,938
Government sponsored mortgage-backed securities not due on a single maturity date		69,518,311		68,688,521
	$	101,767,562	$	100,308,527

The amortized cost and approximate fair values of securities classified as held to maturity are as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Approximate Fair Value
As of June 30, 2014
Debt Securities:
Government sponsored mortgage-backed securities	$	69,862	$	1,766	$	-	$	71,628

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Approximate Fair Value
As of December 31, 2013
Debt Securities:
Government sponsored mortgage-backed securities	$	79,162	$	1,927	$	-	$	81,089

Maturities of held-to-maturity securities as of June 30, 2014:

	Amortized Cost		Approximate Fair Value
Government sponsored mortgage-backed securities not due on a single maturity date	$	69,862	$	71,628

The book value of securities pledged as collateral, to secure public deposits and for other purposes, amounted to $47,029,182 and $44,717,470 as of June 30, 2014 and December 31, 2013, respectively. The approximate fair value of pledged securities amounted to $46,098,539 and $42,807,840 as of June 30, 2014 and December 31, 2013, respectively.

Realized gains and losses are recorded as net securities gains. Gains on sales of securities are determined on the specific identification method. Gross gains of $10,691 and $204,983 as of June 30, 2014 and June 30, 2013, respectively, were realized from the sale of available-for-sale securities. The tax effect of these net gains was $3,956 and $75,844 as of June 30, 2014 and June 30, 2013, respectively.

The Company evaluates all securities quarterly to determine if any unrealized losses are deemed to be other than temporary. Certain investment securities are valued at less than their historical cost. These declines are primarily the result of the rate for these investments yielding less than current market rates, or declines in stock prices of equity securities. Based on evaluation of available evidence, management believes the declines in fair value for these securities are temporary. It is management’s intent to hold the debt securities to maturity or until recovery of the unrealized loss. Should the impairment of any of these debt securities become other than temporary, the cost basis of the investment will be reduced and the resulting loss recognized in net income in the period the other-than-temporary impairment is identified, to the extent the loss is related to credit issues, and to other comprehensive income to the extent the decline on debt securities is related to other factors and the Company does not intend to sell the security prior to recovery of the unrealized loss.

          Certain other investments in debt and equity securities are reported in the financial statements at an amount less than their historical cost. Total fair value of these investments at June 30, 2014 and December 31, 2013, was $82,234,766 and $85,712,067, respectively, which is approximately 82% and 88% of the Company’s investment portfolio. These declines primarily resulted from changes in market interest rates and failure of certain investments to meet projected earnings targets.

The following table shows gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2014 and December 31, 2013.

	June 30, 2014
	Less than 12 Months					12 Months or More					Total
Description of Securities	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Equity Securities	$	-	$	-		$	33,459	$	(14,468	)	$	33,459	$	(14,468	)
U. S. government agencies		-		-			17,337,226		(521,929	)		17,337,226		(521,929	)
Municipals		2,729,915		(15,070	)		7,181,252		(195,297	)		9,911,167		(210,367	)
Government sponsored mortgage-backed securities		19,800,679		(111,552	)		35,152,236		(1,021,504	)		54,952,914		(1,133,056	)
	$	22,530,594	$	(126,622	)	$	59,704,173	$	(1,753,199	)	$	82,234,766	$	(1,879,821	)

	December 31, 2013
	Less than 12 Months					12 Months or More					Total
Description of Securities	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Equity Securities	$	-	$	-		$	29,014	$	(18,913	)	$	29,014	$	(18,913	)
U. S. government agencies		24,731,730		(916,208	)		7,029,657		(521,270	)		31,761,387		(1,437,478	)
Municipals		10,460,662		(534,440	)		1,701,215		(125,581	)		12,161,877		(660,021	)
Government sponsored mortgage-backed securities		32,074,646		(1,655,296	)		9,685,143		(509,946	)		41,759,789		(2,165,242	)
	$	67,267,038	$	(3,105,944	)	$	18,445,029	$	(1,175,710	)	$	85,712,067	$	(4,281,654	)

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Note 3 - Securities (Details) (USD $)	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
Investments, Debt and Equity Securities [Abstract]
Available for Sale Securities Pledged as Collateral, Book Value	$ 47,029,182		$ 44,717,470
Available-for-sale Securities Pledged as Collateral	46,098,539		42,807,840
Available-for-sale Securities, Gross Realized Gains	10,691	204,983
Available for Sale Securities Gross Realized Gain (Loss) Tax Effect	3,956	75,844
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value	$ 82,234,766		$ 85,712,067
Percentage of Securities in Continuous Unrealized Loss Position to Total Investment Portfolio	82.00%		88.00%

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Note 4 - Loans and Allowance for Loan Losses (Tables)

6 Months Ended

Jun. 30, 2014

Receivables [Abstract]

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

	June 30,			December 31,
	2014			2013
Real estate - residential mortgage:
One to four family units	$	95,356,636		$	93,797,650
Multi-family		31,969,145			46,188,434
Real estate - construction		39,159,239			43,266,130
Real estate - commercial		188,307,781			179,079,433
Commercial loans		89,248,153			92,721,783
Consumer and other loans		17,074,824			17,303,392
Total loans		461,115,778			472,356,822
Less:
Allowance for loan losses		(6,788,409	)		(7,801,600	)
Deferred loan fees/costs, net		(175,373	)		(175,368	)
Net loans	$	454,151,996		$	464,379,854

Past Due Financing Receivables [Table Text Block]

As of June 30, 2014
	30-59 Days Past Due		60-89 Days Past Due		90 Days and more Past Due		Total Past Due		Current		Total Loans Receivable		Total Loans > 90 Days and Accruing
	(In Thousands)
Real estate - residential mortgage:
One to four family units	$	14	$	500	$	287	$	801	$	94,556	$	95,357	$	-
Multi-family		-		-		-		-		31,969		31,969		-
Real estate - construction		-		-		-		-		39,159		39,159		-
Real estate - commercial		-		28		-		28		188,280		188,308		-
Commercial loans		-		1,152		-		1,152		88,096		89,248		-
Consumer and other loans		3		38		-		41		17,034		17,075		-
Total	$	17	$	1,718	$	287	$	2,022	$	459,094	$	461,116	$	-

As of December 31, 2013
	30-59 Days Past Due		60-89 Days Past Due		90 Days and more Past Due		Total Past Due		Current		Total Loans Receivable		Total Loans > 90 Days and Accruing
	(In Thousands)
Real estate - residential mortgage:
One to four family units	$	246	$	337	$	-	$	583	$	93,215	$	93,798	$	-
Multi-family		-		-		-		-		46,188		46,188		-
Real estate - construction		-		-		536		536		42,730		43,266		-
Real estate - commercial		-		-		2,604		2,604		176,476		179,080		-
Commercial loans		-		2		3,628		3,630		89,092		92,722		-
Consumer and other loans		19		-		63		82		17,221		17,303		-
Total	$	265	$	339	$	6,831	$	7,435	$	464,922	$	472,357	$	-

Schedule of Financing Receivables, Non Accrual Status [Table Text Block]

	June 30,		December 31,
	2014		2013
Real estate - residential mortgage:
One to four family units	$	1,209,618	$	815,746
Multi-family		-		-
Real estate - construction		3,430,492		4,529,410
Real estate - commercial		514,866		3,663,166
Commercial loans		2,651,340		6,776,230
Consumer and other loans		-		63,027
Total	$	7,806,316	$	15,847,579

Allowance for Credit Losses on Financing Receivables [Table Text Block]

Three months ended June 30, 2014	Construction			Commercial Real Estate			One to four family			Multi-family			Commercial			Consumer and Other			Unallocated			Total
	(In Thousands)
Allowance for loan losses:
Balance, beginning of period	$	2,008		$	2,344		$	962		$	147		$	1,799		$	228		$	273		$	7,761
Provision charged to expense		76			(51	)		65			(1	)		477			32			(273	)	$	325
Losses charged off		(207	)		(9	)		(14	)		-			(1,058	)		(49	)		-		$	(1,337	)
Recoveries		2			-			1			-			26			10			-		$	39
Balance, end of period	$	1,879		$	2,284		$	1,014		$	146		$	1,244		$	221		$	-		$	6,788

Six months ended June 30, 2014	Construction			Commercial Real Estate			One to four family			Multi-family			Commercial			Consumer and Other			Unallocated			Total
	(In Thousands)
Allowance for loan losses:
Balance, beginning of period	$	2,387		$	2,059		$	997		$	209		$	1,519		$	272		$	359		$	7,802
Provision charged to expense		(304	)		234			114			(63	)		914			(11	)		(359	)	$	525
Losses charged off		(207	)		(9	)		(100	)		-			(1,222	)		(68	)		-		$	(1,606	)
Recoveries		3			-			3			-			33			28			-		$	67
Balance, end of period	$	1,879		$	2,284		$	1,014		$	146		$	1,244		$	221		$	-		$	6,788

Three months ended June 30, 2013	Construction			Commercial Real Estate		One to four family			Multi-family		Commercial		Consumer and Other			Unallocated			Total
	(In Thousands)
Allowance for loan losses:
Balance, beginning of period	$	2,253		$	1,911	$	1,234		$	285	$	1,460	$	275		$	694		$	8,112
Provision charged to expense		(282	)		115		66			6		542		(3	)		(194	)	$	250
Losses charged off		-			-		(74	)		-		-		(20	)		-		$	(94	)
Recoveries		28			-		3			-		63		15			-		$	109
Balance, end of period	$	1,999		$	2,026	$	1,229		$	291	$	2,065	$	267		$	500		$	8,377

Six months ended June 30, 2013	Construction			Commercial Real Estate			One to four family			Multi-family		Commercial			Consumer and Other			Unallocated		Total
	(In Thousands)
Allowance for loan losses:
Balance, beginning of period	$	2,525		$	2,517		$	1,316		$	284	$	1,689		$	255		$	154	$	8,740
Provision charged to expense		(126	)		(305	)		40			7		651			37			346	$	650
Losses charged off		(438	)		(186	)		(134	)		-		(373	)		(53	)		-	$	(1,184	)
Recoveries		38			-			7			-		98			28			-	$	171
Balance, end of period	$	1,999		$	2,026		$	1,229		$	291	$	2,065		$	267		$	500	$	8,377

	Construction		Commercial Real Estate		One to four family		Multi-family		Commercial		Consumer and Other		Unallocated		Total
	(In Thousands)
Allowance for loan losses:
Ending balance: individually evaluated for impairment	$	515	$	185	$	48	$	-	$	-	$	10	$	-	$	758
Ending balance: collectively evaluated for impairment	$	1,364	$	2,099	$	966	$	146	$	1,244	$	211	$	-	$	6,030
Loans:
Ending balance: individually evaluated for impairment	$	3,430	$	515	$	1,210	$	-	$	3,438	$	273	$	-	$	8,866
Ending balance: collectively evaluated for impairment	$	35,729	$	187,793	$	94,147	$	31,969	$	85,810	$	16,802	$	-	$	452,250

	Construction		Commercial Real Estate		One to four family		Multi-family		Commercial		Consumer and Other		Unallocated		Total
	(In Thousands)
Allowance for loan losses:
Ending balance: individually evaluated for impairment	$	890	$	-	$	8	$	-	$	601	$	102	$	-	$	1,601
Ending balance: collectively evaluated for impairment	$	1,497	$	2,059	$	989	$	209	$	918	$	170	$	359	$	6,201
Loans:
Ending balance: individually evaluated for impairment	$	4,530	$	3,663	$	886	$	-	$	6,776	$	316	$	-	$	16,171
Ending balance: collectively evaluated for impairment	$	38,736	$	175,417	$	92,912	$	46,188	$	85,946	$	16,987	$	-	$	456,186

Impaired Financing Receivables [Table Text Block]

	June 30, 2014						December 31, 2013
	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Recorded Balance		Unpaid Principal Balance		Specific Allowance
	(In Thousands)
Loans without a specific valuation allowance
Real estate - residential mortgage:
One to four family units	$	896	$	896	$	-	$	620	$	620	$	-
Multi-family		-		-		-		-		-		-
Real estate - construction		93		93		-		96		940		-
Real estate - commercial		28		37		-		3,663		3,663		-
Commercial loans		3,438		4,254		-		2,327		2,462		-
Consumer and other loans		-		-		-		-		-		-
Loans with a specific valuation allowance
Real estate - residential mortgage:
One to four family units	$	314	$	314	$	48	$	267	$	267	$	8
Multi-family		-		-		-		-		-		-
Real estate - construction		3,337		4,388		515		4,433		4,433		890
Real estate - commercial		487		487		185		-		-		-
Commercial loans		-		-		-		4,449		5,148		601
Consumer and other loans		273		273		10		316		316		102
Total
Real estate - residential mortgage:
One to four family units	$	1,210	$	1,210	$	48	$	887	$	887	$	8
Multi-family		-		-		-		-		-		-
Real estate - construction		3,430		4,481		515		4,529		5,373		890
Real estate - commercial		515		524		185		3,663		3,663		-
Commercial loans		3,438		4,254		-		6,776		7,610		601
Consumer and other loans		273		273		10		316		316		102
Total	$	8,866	$	10,742	$	758	$	16,171	$	17,849	$	1,601

	For the Three Months Ended				For the Three Months Ended
	June 30, 2014				June 30, 2013
	Average Investment in Impaired Loans		Interest Income Recognized		Average Investment in Impaired Loans		Interest Income Recognized
	(In Thousands)
Loans without a specific valuation allowance
Real estate - residential mortgage:
One to four family units	$	823	$	-	$	2,164	$	1
Multi-family		-		-		-		-
Real estate - construction		94		-		5,320		-
Real estate - commercial		264		-		5,095		13
Commercial loans		3,486		98		648		-
Consumer and other loans		-		-		96		-
Loans with a specific valuation allowance
Real estate - residential mortgage:
One to four family units	$	325	$	-	$	181	$	-
Multi-family		-		-		-		-
Real estate - construction		3,532		-		613		-
Real estate - commercial		574		-		-		-
Commercial loans		699		-		3,230		-
Consumer and other loans		272		-		305		-
Total
Real estate - residential mortgage:
One to four family units	$	1,148	$	-	$	2,345	$	1
Multi-family		-		-		-		-
Real estate - construction		3,626		-		5,933		-
Real estate - commercial		838		-		5,095		13
Commercial loans		4,185		98		3,878		-
Consumer and other loans		272		-		401		-
Total	$	10,069	$	98	$	17,652	$	14

	For the Six Months Ended				For the Six Months Ended
	June 30, 2014				June 30, 2013
	Average Investment in Impaired Loans		Interest Income Recognized		Average Investment in Impaired Loans		Interest Income Recognized
	(In Thousands)
Loans without a specific valuation allowance
Real estate - residential mortgage:
One to four family units	$	752	$	1	$	2,152	$	3
Multi-family		-		-		-		-
Real estate - construction		95		-		5,214		-
Real estate - commercial		408		-		4,142		36
Commercial loans		3,088		98		646		1
Consumer and other loans		-		-		99		-
Loans with a specific valuation allowance
Real estate - residential mortgage:
One to four family units	$	329	$	-	$	144	$	-
Multi-family		-		-		-		-
Real estate - construction		3,883		-		859		-
Real estate - commercial		412		-		1,122		-
Commercial loans		1,897		-		2,756		-
Consumer and other loans		375		-		339		-
Total
Real estate - residential mortgage:
One to four family units	$	1,081	$	1	$	2,296	$	3
Multi-family		-		-		-		-
Real estate - construction		3,978		-		6,073		-
Real estate - commercial		820		-		5,264		36
Commercial loans		4,985		98		3,402		1
Consumer and other loans		375		-		438		-
Total	$	11,239	$	99	$	17,473	$	40

Troubled Debt Restructurings on Financing Receivables [Table Text Block]

	Number of Loans		Pre-Modification Outstanding Recorded Balance		Post-Modification Outstanding Recorded Balance
Real estate - residential mortgage:
One to four family units		1	$	287,500	$	287,500
Multi-family		-		-		-
Real estate - construction		-		-		-
Real estate - commercial		-		-		-
Commercial loans		-		-		-
Consumer and other loans		-		-		-
Total		1	$	287,500	$	287,500

	Interest Rate		Term		Combination		Total Modification
Real estate - residential mortgage:
One to four family units	$	-	$	-	$	287,500	$	287,500
Multi-family		-		-		-		-
Real estate - construction		-		-		-		-
Real estate - commercial		-		-		-		-
Commercial loans		-		-		-		-
Consumer and other loans		-		-		-		-
Total	$	-	$	-	$	287,500	$	287,500

	June 30,		December 31,
	2014		2013
Real estate - residential mortgage:
One to four family units	$	790,476	$	519,718
Multi-family		-		-
Real estate - construction		3,411,014		4,507,190
Real estate - commercial		486,612		3,026,931
Commercial loans		2,285,821		3,699,243
Consumer and other loans		-		-
Total	$	6,973,923	$	11,753,082

Financing Receivable Credit Quality Indicators [Table Text Block]

	Construction		Commercial Real Estate		One to four family		Multi-family		Commercial		Consumer and Other		Total
	(In Thousands)
Rating:
Pass	$	28,105	$	180,408	$	88,541	$	31,554	$	71,914	$	16,872	$	417,394
Special Mention		7,585		3,874		5,103		-		14,487		-		31,049
Substandard		3,469		3,539		1,713		415		2,847		203		12,186
Doubtful		-		487		-		-		-		-		487
Total	$	39,159	$	188,308	$	95,357	$	31,969	$	89,248	$	17,075	$	461,116

	Construction		Commercial Real Estate		One to four family		Multi-family		Commercial		Consumer and Other		Total
	(In Thousands)
Rating:
Pass	$	31,433	$	169,135	$	83,341	$	45,768	$	78,622	$	16,743	$	425,042
Special Mention		7,253		4,721		8,954		420		9,161		107		30,616
Substandard		683		5,224		1,503		-		2,738		453		10,601
Doubtful		3,897		-		-		-		2,201		-		6,098
Total	$	43,266	$	179,080	$	93,798	$	46,188	$	92,722	$	17,303	$	472,357

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Note 7 - New Accounting Pronouncements

6 Months Ended

Jun. 30, 2014

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

New Accounting Pronouncements and Changes in Accounting Principles [Text Block]

Note 7: New Accounting Pronouncements

In January 2014, the FASB issued ASU No. 2014-01 to amend FASB ASC Topic 323, Investments – Equity Method and Joint Ventures. The objective of this update is to provide guidance on accounting for investments by a reporting entity in flow-through limited liability entities that manage or invest in affordable housing projects that qualify for the low-income housing tax credit. The amendments in the update permit reporting entities to make an accounting policy election to account for their investments in qualified affordable housing projects using the proportional amortization method if certain conditions are met. Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognizes the net investment performance in the income statement as a component of income tax expense (benefit). The update will be effective for the Company beginning January 1, 2015; however, early adoption is permitted. The Company does have significant investments in such qualified affordable housing projects and is currently reviewing the provisions of this update to determine what, if any, impacts it may have on the Company’s financial position or results of operations. The Company expects that there will be no material impact on the Company’s financial position or results of operations, except that the investment amortization expense which is currently included in Other Non-interest Expense in the Consolidated Statements of Income would be removed from Other Non-interest Expense and included in Provision for Income Taxes in the Consolidated Statements of Income. This would have the effect of reducing Non-interest Expense and increasing Provision for Income Taxes, but is not expected to have any impact on Net Income.

In January 2014, the FASB issued ASU No. 2014-04 to amend FASB ASC Topic 310, Receivables – Troubled Debt Restructurings by Creditors. The objective of the amendments in this update is to reduce diversity by clarifying when an in substance repossession or foreclosure occurs, that is, when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan receivable should be derecognized and the real estate property recognized. The amendments in this update clarify that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additionally, the amendments require interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. The update will be effective for the Company beginning January 1, 2015, and is not expected to have a material impact on the Company’s financial position or results of operations.

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Note 5 - Benefit Plans

6 Months Ended

Jun. 30, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Note 5: Benefit Plans

The Company has stock-based employee compensation plans, which are described in the Company’s December 31, 2013 Annual Report on Form 10-K.     

The table below summarizes transactions under the Company’s stock option plans for six months ended June 30, 2014:

	Incentive Stock Option			Non-Incentive Stock Option			Weighted Average Exercise Price
Balance outstanding as of January 1, 2014		168,100			121,000		$	16.54
Granted		-			-			-
Exercised		(11,800	)		(4,500	)		5.20
Forfeited		-			(21,500	)		18.00
Balance outstanding as of June 30, 2014		156,300			95,000			17.15
Options exercisable as of June 30, 2014		149,200			85,750			17.98

Stock-based compensation expense, consisting of stock options and restricted stock awards, recognized for the three months ended June 30, 2014 and 2013 was $30,918 and $35,461, respectively. Stock-based compensation expense recognized for the six months ended June 30, 2014 and 2013 was $190,490 and $187,275, respectively. As of June 30, 2014, there was $5,525 of unrecognized compensation expense related to nonvested stock options and $222,210 of unrecognized compensation expense related to nonvested restricted stock awards, which will be recognized over the remaining vesting period.

In February 2014 and January 2013, the Company granted restricted stock to directors pursuant to the 2010 Equity Plan that was fully vested and thus, expensed in full on the date of the grants. The amount expensed was $122,538 and $116,032 for 2014 and 2013, respectively, which represents 11,242 shares of common stock at a market price of $10.90 at the date of grant in 2014 and 16,576 shares of common stock at a market price of $7.00 at the date of grant in 2013.

In February 2014, the company granted 21,820 shares of restricted stock to officers that have a cliff vesting at the end of three years. The expense is being recognized over the applicable vesting period. The amount expensed during the six months ended June 30, 2014 was $31,871.

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Note 6 - Income Per Common Share

6 Months Ended

Jun. 30, 2014

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

Note 6: Income Per Common Share

	For three months ended June 30, 2014						For six months ended June 30, 2014
	Income Available to Common Shareholders		Common Shares Outstanding		Per Common Share		Income Available to Common Shareholders		Common Shares Outstanding		Per Common Share
Basic Income Per Common Share	$	1,227,683		4,265,050	$	0.29	$	2,282,899		3,718,791	$	0.61
Effect of Dilutive Securities				72,430						72,988
Diluted Income Per Common Share	$	1,227,683		4,337,480	$	0.28	$	2,282,899		3,791,779	$	0.60

	For three months ended June 30, 2013						For six months ended June 30, 2013
	Income Available to Common Shareholders		Average Common Shares Outstanding		Per Common Share		Income Available to Common Shareholders		Average Common Shares Outstanding		Per Common Share
Basic Income Per Common Share	$	1,369,110		2,731,727	$	0.50	$	2,123,133		2,735,533	$	0.78
Effect of Dilutive Securities				75,197						72,214
Diluted Income Per Common Share	$	1,369,110		2,806,924	$	0.49	$	2,123,133		2,807,747	$	0.76

Stock options to purchase 136,500 of common stock were outstanding during the three and six months ended June 30, 2014, respectively, and stock options to purchase 197,500 shares of common stock were outstanding during the three and six months ended June 30, 2013, respectively, but were not included in the computation of diluted income per common share because their exercise prices were greater than the average market price of the common shares.

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Note 8 - Disclosures about Fair Value of Assets and Liabilities

6 Months Ended

Jun. 30, 2014

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

Note 8: Disclosures about Fair Value of Assets and Liabilities

ASC Topic 820, Fair Value Measurements, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Topic 820 also specifies a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

Level 1:   Quoted prices in active markets for identical assets or liabilities

Level 2:   Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities

Level 3:   Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities

The following is a description of the inputs and valuation methodologies used for assets measured at fair value on a recurring basis and recognized in the accompanying condensed consolidated balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy.

Available-for-sale securities: Where quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. Level 1 securities include equity securities. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics or discounted cash flows. For these investments, the inputs used by the pricing service to determine fair value may include one or a combination of observable inputs such as benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bid offers and reference data market research publications and are classified within Level 2 of the valuation hierarchy. Level 2 securities include U.S. government agencies and government sponsored mortgage-backed securities. The Company has no Level 3 securities.

The following table presents the fair value measurements of assets recognized in the accompanying condensed consolidated balance sheets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at June 30, 2014 and December 31, 2013 (dollar amounts in thousands):

June 30, 2014
Financial assets:
	Level 1 inputs		Level 2 inputs		Level 3 inputs		Total fair value
Equity securities	$	106	$	-	$	-	$	106
Debt securities:
U.S. government agencies		-		17,337		-		17,337
Municipals		-		14,283		-		14,283
Government sponsored mortgage-backed securities		-		68,689		-		68,689
Available-for-sale securities	$	106	$	100,309	$	-	$	100,415

December 31, 2013
Financial assets:
	Level 1 inputs		Level 2 inputs		Level 3 inputs		Total fair value
Equity securities	$	99	$	-	$	-	$	99
Debt securities:
U.S. government agencies		-		31,762		-		31,762
Municipals		-		13,493		-		13,493
Corporate Bonds		-		994		-		994
Government sponsored mortgage-backed securities		-		51,345		-		51,345
Available-for-sale securities	$	99	$	97,594	$	-	$	97,693

The following is a description of the valuation methodologies used for assets measured at fair value on a nonrecurring basis and recognized in the accompanying balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy.

Foreclosed Assets Held for Sale:   Fair value is estimated using recent appraisals, comparable sales and other estimates of value obtained principally from independent sources, adjusted for selling costs. Foreclosed assets held for sale are classified within Level 3 of the valuation hierarchy.

Impaired loans (Collateral Dependent):   Loans for which it is probable that the Company will not collect all principal and interest due according to contractual terms are measured for impairment. Allowable methods for determining the amount of impairment include estimating fair value using the fair value of the collateral for collateral dependent loans.

If the impaired loan is identified as collateral dependent, then the fair value method of measuring the amount of impairment is utilized. This method requires obtaining a current independent appraisal of the collateral and applying a discount factor to the value. Impaired loans that are collateral dependent are classified within Level 3 of the fair value hierarchy when impairment is determined using the fair value method.

The following table presents the fair value measurement of assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at June 30, 2014 and December 31, 2013 (dollar amounts in thousands):

Impaired loans:
	Level 1 inputs		Level 2 inputs		Level 3 inputs		Total fair value
June 30, 2014	$	-	$	-	$	7,069	$	7,069
December 31, 2013	$	-	$	-	$	10,305	$	10,305

Foreclosed assets held for sale:
	Level 1 inputs		Level 2 inputs		Level 3 inputs		Total fair value
June 30, 2014	$	-	$	-	$	-	$	-
December 31, 2013	$	-	$	-	$	2,340	$	2,340

There were no transfers between valuation levels for any asset during the six months ended June 30, 2014 or 2013. If valuation techniques are deemed necessary, the Company considers those transfers to occur at the end of the period when the assets are valued.

The following table presents quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurement (dollar amounts in thousands):

	Fair Value June 30, 2014		Valuation Technique	Unobservable Input	Range (Weighted Average)
Impaired loans (collateral dependent)	$	7,069	Market Comparable	Discount to reflect realizable value		0%-38	%	(12%)
Impaired loans	$	-	Discounted cash flow	Discount rate		0	%
Foreclosed assets held for sale	$	-	Market Comparable	Discount to reflect realizable value		0	%

The following methods were used to estimate the fair value of all other financial instruments recognized in the accompanying condensed consolidated balance sheets at amounts other than fair value.

Cash and cash equivalents, interest-bearing deposits and Federal Home Loan Bank stock

The carrying amounts reported in the condensed consolidated balance sheets approximate those assets' fair value.

Held-to-maturity securities

Fair value is based on quoted market prices, if available. If a quoted market price is not available, fair value is estimated using quoted market prices for similar securities.

Loans

The fair value of loans is estimated by discounting the future cash flows using the market rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. Loans with similar characteristics were aggregated for purposes of the calculations. The carrying amount of accrued interest approximates its fair value.

Deposits

Deposits include demand deposits, savings accounts, NOW accounts and certain money market deposits. The carrying amount approximates fair value. The fair value of fixed-maturity certificates of deposit is estimated by discounting the future cash flows using rates currently offered for deposits of similar remaining maturities.

Federal Home Loan Bank advances and securities sold under agreements to repurchase

The fair value of advances and securities sold under agreements to repurchase is estimated by using rates on debt with similar terms and remaining maturities.

Subordinated debentures

For these variable rate instruments, the carrying amount is a reasonable estimate of fair value. There is currently a limited market for similar debt instruments and the Company has the option to call the subordinated debentures at an amount close to its par value.

Interest payable

The carrying amount approximates fair value.

Commitments to originate loans, letters of credit and lines of credit

The fair value of commitments to originate loans is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present credit worthiness of the counterparties. For fixed-rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates. The fair value of letters of credit and lines of credit are based on fees currently charged for similar agreements or on the estimated cost to terminate them or otherwise settle the obligations with the counterparties at the reporting date.

The following tables present estimated fair values of the Company’s financial instruments at June 30, 2014 and December 31, 2013.

	June 30, 2014
	Carrying Amount		Fair Value		Hierarchy Level
Financial assets:
Cash and cash equivalents	$	20,831,026	$	20,831,026		1
Held-to-maturity securities		69,862		71,628		2
Federal Home Loan Bank stock		2,878,900		2,878,900		2
Mortgage loans held for sale		1,221,633		1,221,633		2
Loans, net		454,151,996		456,076,651		3
Interest receivable		1,839,238		1,839,238		2
Financial liabilities:
Deposits		481,152,569		472,721,120		2
Federal Home Loan Bank advances		53,400,000		55,526,499		2
Securities sold under agreements to repurchase		10,000,000		10,529,097		2
Subordinated debentures		15,465,000		15,465,000		3
Interest payable		239,297		239,297		2
Unrecognized financial instruments (net of contractual value):
Commitments to extend credit		-		-		-
Unused lines of credit		-		-		-

	December 31, 2013
	Carrying Amount		Fair Value		Hierarchy Level
Financial assets:
Cash and cash equivalents	$	12,303,200	$	12,303,200		1
Held-to-maturity securities		79,162		81,089		2
Federal Home Loan Bank stock		2,885,100		2,885,100		2
Mortgage loans held for sale		623,432		623,432		2
Loans, net		464,379,854		466,057,001		3
Interest receivable		1,852,641		1,852,641		2
Financial liabilities:
Deposits		487,318,939		476,503,513		2
Federal Home Loan Bank advances		55,350,000		57,185,083		2
Securities sold under agreements to repurchase		10,000,000		7,978,555		2
Subordinated debentures		15,465,000		15,465,000		3
Interest payable		250,361		250,361		2
Unrecognized financial instruments (net of contractual value):
Commitments to extend credit		-		-		-
Unused lines of credit		-		-		-

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Note 4 - Loans and Allowance for Loan Losses (Details) - Impaired Loans (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
Real estate - residential mortgage:
Loans, specific valuation allowance	$ 758		$ 758		$ 1,601
Real estate - residential mortgage:
Loans, recorded balance	8,866		8,866		16,171
Loans, unpaid principal balance	10,742		10,742		17,849
Loans, specific valuation allowance	758		758		1,601
Loans, average investment	10,069	17,652	11,239	17,473
Loans, interest income recognized	98	14	99	40
One to Four Family Units [Member]
Real estate - residential mortgage:
Loans without a specific valuation allowance, recorded balance	896		896		620
Loans without a specific valuation allowance, unpaid principal balance	896		896		620
Loans without a specific valuation allowance, average investment	823	2,164	752	2,152
Loans without a specific valuation allowance, interest income recognized		1	1	3
Real estate - residential mortgage:
Loans with a specific valuation allowance, recorded balance	314		314		267
Loans with a specific valuation allowance, unpaid principal balance	314		314		267
Loans, specific valuation allowance	48		48		8
Loans with a specific valuation allowance, average investment	325	181	329	144
Real estate - residential mortgage:
Loans, recorded balance	1,210		1,210		887
Loans, unpaid principal balance	1,210		1,210		887
Loans, specific valuation allowance	48		48		8
Loans, average investment	1,148	2,345	1,081	2,296
Loans, interest income recognized		1	1	3
Real Estate Construction [Member]
Real estate - residential mortgage:
Loans without a specific valuation allowance, recorded balance	93		93		96
Loans without a specific valuation allowance, unpaid principal balance	93		93		940
Loans without a specific valuation allowance, average investment	94	5,320	95	5,214
Real estate - residential mortgage:
Loans with a specific valuation allowance, recorded balance	3,337		3,337		4,433
Loans with a specific valuation allowance, unpaid principal balance	4,388		4,388		4,433
Loans, specific valuation allowance	515		515		890
Loans with a specific valuation allowance, average investment	3,532	613	3,883	859
Real estate - residential mortgage:
Loans, recorded balance	3,430		3,430		4,529
Loans, unpaid principal balance	4,481		4,481		5,373
Loans, specific valuation allowance	515		515		890
Loans, average investment	3,626	5,933	3,978	6,073
Real Estate Commercial [Member]
Real estate - residential mortgage:
Loans without a specific valuation allowance, recorded balance	28		28		3,663
Loans without a specific valuation allowance, unpaid principal balance	37		37		3,663
Loans without a specific valuation allowance, average investment	264	5,095	408	4,142
Loans without a specific valuation allowance, interest income recognized		13		36
Real estate - residential mortgage:
Loans with a specific valuation allowance, recorded balance	487		487
Loans with a specific valuation allowance, unpaid principal balance	487		487
Loans, specific valuation allowance	185		185
Loans with a specific valuation allowance, average investment	574		412	1,122
Real estate - residential mortgage:
Loans, recorded balance	515		515		3,663
Loans, unpaid principal balance	524		524		3,663
Loans, specific valuation allowance	185		185
Loans, average investment	838	5,095	820	5,264
Loans, interest income recognized		13		36
Commercial Loans [Member]
Real estate - residential mortgage:
Loans without a specific valuation allowance, recorded balance	3,438		3,438		2,327
Loans without a specific valuation allowance, unpaid principal balance	4,254		4,254		2,462
Loans without a specific valuation allowance, average investment	3,486	648	3,088	646
Loans without a specific valuation allowance, interest income recognized	98		98	1
Real estate - residential mortgage:
Loans with a specific valuation allowance, recorded balance					4,449
Loans with a specific valuation allowance, unpaid principal balance					5,148
Loans, specific valuation allowance					601
Loans with a specific valuation allowance, average investment	699	3,230	1,897	2,756
Real estate - residential mortgage:
Loans, recorded balance	3,438		3,438		6,776
Loans, unpaid principal balance	4,254		4,254		7,610
Loans, specific valuation allowance					601
Loans, average investment	4,185	3,878	4,985	3,402
Loans, interest income recognized	98		98	1
Consumer and Other Loans [Member]
Real estate - residential mortgage:
Loans without a specific valuation allowance, average investment		96		99
Real estate - residential mortgage:
Loans with a specific valuation allowance, recorded balance	273		273		316
Loans with a specific valuation allowance, unpaid principal balance	273		273		316
Loans, specific valuation allowance	10		10		102
Loans with a specific valuation allowance, average investment	272	305	375	339
Real estate - residential mortgage:
Loans, recorded balance	273		273		316
Loans, unpaid principal balance	273		273		316
Loans, specific valuation allowance	10		10		102
Loans, average investment	$ 272	$ 401	$ 375	$ 438

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Note 6 - Income Per Common Share (Tables)

6 Months Ended

Jun. 30, 2014

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	For three months ended June 30, 2014						For six months ended June 30, 2014
	Income Available to Common Shareholders		Common Shares Outstanding		Per Common Share		Income Available to Common Shareholders		Common Shares Outstanding		Per Common Share
Basic Income Per Common Share	$	1,227,683		4,265,050	$	0.29	$	2,282,899		3,718,791	$	0.61
Effect of Dilutive Securities				72,430						72,988
Diluted Income Per Common Share	$	1,227,683		4,337,480	$	0.28	$	2,282,899		3,791,779	$	0.60

	For three months ended June 30, 2013						For six months ended June 30, 2013
	Income Available to Common Shareholders		Average Common Shares Outstanding		Per Common Share		Income Available to Common Shareholders		Average Common Shares Outstanding		Per Common Share
Basic Income Per Common Share	$	1,369,110		2,731,727	$	0.50	$	2,123,133		2,735,533	$	0.78
Effect of Dilutive Securities				75,197						72,214
Diluted Income Per Common Share	$	1,369,110		2,806,924	$	0.49	$	2,123,133		2,807,747	$	0.76

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Note 3 - Securities (Details) - Held-to-maturity Securities (Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member], USD $)	Jun. 30, 2014	Dec. 31, 2013
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Debt Securities:
Held-to-maturity securities, amortized cost	$ 69,862	$ 79,162
Held-to-maturity securities, gross unrealized gains	1,766	1,927
Held-to-maturity securities, approximate fair value	$ 71,628	$ 81,089

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Note 8 - Disclosures about Fair Value of Assets and Liabilities (Details) - Fair Value of Assets Measured on Recurring Basis (USD $)	Jun. 30, 2014	Dec. 31, 2013
Note 8 - Disclosures about Fair Value of Assets and Liabilities (Details) - Fair Value of Assets Measured on Recurring Basis [Line Items]
Available-for-sale securities	$ 100,414,541	$ 97,692,685
Equity Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Note 8 - Disclosures about Fair Value of Assets and Liabilities (Details) - Fair Value of Assets Measured on Recurring Basis [Line Items]
Available-for-sale securities	106,000	99,000
Equity Securities [Member]
Note 8 - Disclosures about Fair Value of Assets and Liabilities (Details) - Fair Value of Assets Measured on Recurring Basis [Line Items]
Available-for-sale securities	106,014	99,306
US Government Agencies Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Note 8 - Disclosures about Fair Value of Assets and Liabilities (Details) - Fair Value of Assets Measured on Recurring Basis [Line Items]
Available-for-sale securities	17,337,000	31,762,000
US Government Agencies Debt Securities [Member]
Note 8 - Disclosures about Fair Value of Assets and Liabilities (Details) - Fair Value of Assets Measured on Recurring Basis [Line Items]
Available-for-sale securities	17,337,226	31,761,387
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Note 8 - Disclosures about Fair Value of Assets and Liabilities (Details) - Fair Value of Assets Measured on Recurring Basis [Line Items]
Available-for-sale securities	14,283,000	13,493,000
US States and Political Subdivisions Debt Securities [Member]
Note 8 - Disclosures about Fair Value of Assets and Liabilities (Details) - Fair Value of Assets Measured on Recurring Basis [Line Items]
Available-for-sale securities	14,282,780	13,492,627
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] | Fair Value, Inputs, Level 2 [Member]
Note 8 - Disclosures about Fair Value of Assets and Liabilities (Details) - Fair Value of Assets Measured on Recurring Basis [Line Items]
Available-for-sale securities	68,689,000	51,345,000
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Note 8 - Disclosures about Fair Value of Assets and Liabilities (Details) - Fair Value of Assets Measured on Recurring Basis [Line Items]
Available-for-sale securities	68,688,521	51,345,093
Domestic Corporate Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Note 8 - Disclosures about Fair Value of Assets and Liabilities (Details) - Fair Value of Assets Measured on Recurring Basis [Line Items]
Available-for-sale securities		994,000
Domestic Corporate Debt Securities [Member]
Note 8 - Disclosures about Fair Value of Assets and Liabilities (Details) - Fair Value of Assets Measured on Recurring Basis [Line Items]
Available-for-sale securities		994,000
Fair Value, Inputs, Level 1 [Member]
Note 8 - Disclosures about Fair Value of Assets and Liabilities (Details) - Fair Value of Assets Measured on Recurring Basis [Line Items]
Available-for-sale securities	106,000	99,000
Fair Value, Inputs, Level 2 [Member]
Note 8 - Disclosures about Fair Value of Assets and Liabilities (Details) - Fair Value of Assets Measured on Recurring Basis [Line Items]
Available-for-sale securities	$ 100,309,000	$ 97,594,000

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Condensed Consolidated Statements of Comprehensive Income (Unaudited) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
NET INCOME	$ 1,338,683	$ 1,567,740	$ 2,640,109	$ 2,520,393
OTHER ITEMS OF COMPREHENSIVE INCOME (LOSS):
Change in unrealized gain (loss) on investment securities available-for-sale, before income taxes	1,248,693	(3,722,649)	2,533,631	(4,104,800)
Less: Reclassification adjustment for realized gains on investment securities included in net income, before income taxes	(7,603)	(116,182)	(10,691)	(204,983)
Total other items in comprehensive income (loss)	1,241,090	(3,838,831)	2,522,940	(4,309,783)
Income tax expense (benefit) related to other items of comprehensive income	459,203	(1,420,367)	933,488	(1,594,619)
Other comprehensive income (loss)	781,887	(2,418,464)	1,589,452	(2,715,164)
TOTAL COMPREHENSIVE INCOME (LOSS)	$ 2,120,570	$ (850,724)	$ 4,229,561	$ (194,771)

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Note 2 - Principles of Consolidation

6 Months Ended

Jun. 30, 2014

Disclosure Text Block [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

Note 2: Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Guaranty Bank (the “Bank”). All significant intercompany transactions and balances have been eliminated in consolidation.

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Note 3 - Securities (Details) - Held-to-maturity Securities by Maturity (USD $)	Jun. 30, 2014
Held-to-maturity Securities by Maturity [Abstract]
Government sponsored mortgage-backed securities not due on a single maturity date	$ 69,862
Government sponsored mortgage-backed securities not due on a single maturity date	$ 71,628

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Note 5 - Benefit Plans (Details) - Stock Option Activity (USD $)	6 Months Ended
	Jun. 30, 2014
Note 5 - Benefit Plans (Details) - Stock Option Activity [Line Items]
Balance outstanding as of January 1, 2014 (in Dollars per share)	$ 16.54
Balance outstanding as of June 30, 2014 (in Dollars per share)	$ 17.15
Options exercisable as of June 30, 2014 (in Dollars per share)	$ 17.98
Exercised (in Dollars per share)	$ 5.20
Forfeited (in Dollars per share)	$ 18.00
Incentive Stock Options [Member]
Note 5 - Benefit Plans (Details) - Stock Option Activity [Line Items]
Balance outstanding as of January 1, 2014	168,100
Balance outstanding as of June 30, 2014	156,300
Options exercisable as of June 30, 2014	149,200
Exercised	(11,800)
Non-Incentive Stock Options [Member]
Note 5 - Benefit Plans (Details) - Stock Option Activity [Line Items]
Balance outstanding as of January 1, 2014	121,000
Balance outstanding as of June 30, 2014	95,000
Options exercisable as of June 30, 2014	85,750
Exercised	(4,500)
Forfeited	(21,500)

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Note 5 - Benefit Plans (Tables)

6 Months Ended

Jun. 30, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

	Incentive Stock Option			Non-Incentive Stock Option			Weighted Average Exercise Price
Balance outstanding as of January 1, 2014		168,100			121,000		$	16.54
Granted		-			-			-
Exercised		(11,800	)		(4,500	)		5.20
Forfeited		-			(21,500	)		18.00
Balance outstanding as of June 30, 2014		156,300			95,000			17.15
Options exercisable as of June 30, 2014		149,200			85,750			17.98