<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
Great Guaranty Bancshares, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
(3) Filing Party:
-----------------------------------------------------------------------
(4) Date Filed:
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<PAGE> 2
[GREAT GUARANTY BANCSHARES LETTERHEAD]
March 31, 2000
Dear Shareholders,
The annual shareholder meeting of the Great Guaranty Bancshares, Inc. will be
held May 10, 2000 at 10:00 a.m. in the Board Room of Guaranty Bank and Trust
Company, 175 New Roads Street, New Roads, La. Enclosed you will find the notice
of annual shareholder meeting, a proxy statement and a prospectus on the
consolidated operations of Great Guaranty Bancshares and Guaranty Bank. Please
date, sign and mail promptly the enclosed proxy ballot for which a return
envelope is provided.
The main purpose of the meeting is to elect Directors for the next year. We are
pleased to announce the nomination of a new individual, Chad Soprano, to serve
on the Board of Directors together with the Directors currently serving.
As you are aware Guaranty Bank ended 1999 on a good note and the New, 2000
Millennium looks to be a promising year also. Our loan demand is increasing and
we have new deposit products that we will be introducing in the near future.
Guaranty Banks Mission states, in part: "We provide value to our shareholders,
customers, employees and community by exceeding expectations and ensuring
quality results as a locally owned bank". Thank you for the support and
confidence that you have extended over the years. We appreciate your business.
Very Truly Yours,
<TABLE>
<S> <C>
/s/ J. LEVY DABADIE, JR. /s/ J. WADE O'NEAL, III
- ------------------------------------ --------------------------------------
J. Levy Dabadie, Jr. - Director J. Wade O'Neal, III-President/CEO/Director
/s/ DR. DONALD DOUCET /s/ H. T. OLINDE, JR.
- ------------------------------------ ------------------------------------
Dr. Donald Doucet - Director H. T. Olinde, Jr. - Chairman of the Board
/s/ SYLVESTER MUCKELROY /s/ J. LAYNE ORILLION
- ------------------------------------ -------------------------------
Mayor Sylvester Muckelroy - Director J. Layne Orillion - Director
/s/ CRAIG A. MAJOR /s/ F. GREGORY ROY
- ------------------------------------ ---------------------------------
Craig A. Major - Director F. Gregory Roy - Director
/s/ CHAD SOPRANO
-------------------------
Chad Soprano - Director
</TABLE>
<PAGE> 3
GREAT GUARANTY BANCSHARES, INC.
175 NEW ROADS STREET
NEW ROADS, LOUISIANA 70760
NOTICE OF 2000 ANNUAL MEETING OF SHAREHOLDERS
To the shareholders of Great Guaranty Bancshares, Inc.:
PLEASE TAKE NOTICE that the 2000 Annual Meeting of Shareholders of Great
Guaranty Bancshares, Inc. will be held at the offices of Guaranty Bank & Trust
Company, 175 New Roads Street, New Roads, Louisiana on Wednesday, May 10, 2000
at 10:00 a.m. The Annual Meeting is being held to consider and act upon:
(1)the election of nine (9) persons to the Board of Directors to serve
until the 2001 Annual Meeting of Shareholders or until each of their successors
is duly elected and qualified; and
(2)such other business as may properly come before the Annual Meeting or
any adjournment thereof.
The Board of Directors has FIXED THE CLOSE OF BUSINESS ON MARCH 15, 2000 as
the record date for the determination of shareholders entitled to notice of, and
to vote at, the Annual Meeting. You are cordially invited to attend the Annual
Meeting, but if you do not expect to attend, PLEASE EXECUTE, DATE AND RETURN the
enclosed proxy card in the enclosed postage-paid envelope as soon as possible to
ensure that your shares will be voted at the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ HUMPHREY T. OLINDE, JR.
Humphrey T. Olinde, Jr.
Chairman of the Board
New Roads, Louisiana
March, 2000
IMPORTANT
TO ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE DATE, SIGN AND MAIL
PROMPTLY THE ENCLOSED PROXY FOR WHICH A RETURN ENVELOPE IS PROVIDED.
<PAGE> 4
GREAT GUARANTY BANCSHARES, INC.
175 NEW ROADS STREET
NEW ROADS, LOUISIANA 70760
PROXY STATEMENT
INTRODUCTION
The accompanying Proxy is solicited on behalf of the Board of Directors of
Great Guaranty Bancshares, Inc., a Louisiana corporation("Bancshares"), for use
at the 2000 Annual Meeting of Shareholders of Bancshares, (the "Annual Meeting")
to be held at 10:00 a.m. on Wednesday, May 10, 2000, at the offices of Guaranty
Bank & Trust Company, 175 New Roads Street, New Roads, Louisiana, and any
postponements or adjournments thereof. This Proxy Statement is being furnished
in connection with the Annual Meeting. Bancshares anticipates that this Proxy
Statement and the accompanying Proxy will be first sent or given to shareholders
of Bancshares on approximately April 1, 2000.
Shareholders are being asked at the Annual Meeting to elect the nine (9)
persons identified below to the Bancshares Board of Directors to serve until the
2001 Annual Meeting of Shareholders or until their successors are duly elected
and qualified.
The Board of Directors has fixed the close of business on March 15, 2000 as
the record date (the "Record Date") for the determination of the shareholders
entitled to notice of, and to vote at, the Annual Meeting. On the Record Date,
Bancshares had issued and outstanding and entitled to vote 143,374 shares of its
common stock, $7.50 par value (the "Common Stock"). The Common Stock is the only
outstanding class of voting securities of Bancshares. Each outstanding share of
Common Stock will be entitled to one vote on each matter considered at the
Annual Meeting. There is no cumulative voting. The enclosed form of Proxy
provides a means for a shareholder to vote for all the nominees listed for
director or to withhold authority to vote for one or more of those nominees. Any
shareholder giving a Proxy has the power to revoke it at any time before it is
exercised by providing written notice of revocation to the Secretary of
Bancshares or by filing a Proxy of a later date with the Secretary of
Bancshares. The holders of a majority of the total voting power of the
outstanding shares of Common Stock as of the Record Date, whether present in
person or represented by proxy, will constitute a quorum for the transaction of
business at the Annual Meeting. The shares held by each shareholder who signs
and returns the enclosed form of Proxy will be counted for purposes of
determining the presence of a quorum at the Annual Meeting, whether or not the
shareholder abstains on all or any matter to be acted on at the Annual Meeting.
Unless the shareholder specifies otherwise, a Proxy in the accompanying form
which is properly executed and returned will be voted FOR the election as
directors of the nine nominees listed in this Proxy Statement.
The cost of preparing, assembling, printing and mailing this Proxy
Statement, the form of Proxy, and the Notice of Annual Meeting of Shareholders
will be paid by Bancshares. In addition to solicitation by use of the mail,
solicitation of Proxies may also be made personally by directors, officers and
employees of Bancshares, and no additional compensation will be paid to such
individuals for the solicitation services.
The principal executive offices of Bancshares are located at 175 New Roads
Street, New Roads, Louisiana 70760, and its telephone number is (225) 638-8621.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of March 15, 2000 the following person was known by Bancshares to be the
beneficial owner of five(5%) percent or more of the outstanding shares of Common
Stock of Bancshares:
<TABLE>
<CAPTION>
Name and Address of
Title of Class Beneficial Owner Shares Beneficially Owned Percent of Class
- -------------- ------------------- ------------------------- ----------------
<S> <C> <C> <C>
Common Stock H.T. Olinde, Jr.(1) 12,488 8.71%
P.O. Box 440
New Roads, La 70760
</TABLE>
- --------------------
(1) Includes shares voted by Mr. Olinde but owned by B. Olinde & Sons (3.405
shares)
<PAGE> 5
SECURITY OWNERSHIP OF MANAGEMENT
The following table indicates the beneficial ownership as of March 15,
2000, of Bancshares Common Stock by (i) each director and each nominee for
director of Bancshares, (ii) the chief executive officer of Guaranty Bank &
Trust Co., a wholly owned subsidiary and the principal asset of Bancshares
("Guaranty Bank"), and (iii) all directors, nominees for director and executive
officers of Bancshares and Guaranty Bank as a group:
<TABLE>
<CAPTION>
Name and Position Shares Beneficially Owned Percent of Class
- ----------------- ------------------------- ----------------
<S> <C> <C>
Joseph L. Dabadie, Director 606 *
Dr. Donald Doucet, Director 340 *
Craig A. Major, Director 436 *
Sylvester Muckleroy, Director 221 *
H.T. Olinde, Jr., Director 12,488 8.71%
J. Layne Orillion, Director 150 *
F. Gregory Roy, Director 348 *
M. Chad Soprano, Nominee 140 *
J. Wade O'Neal,Guaranty Bank 140 *
President and Chief Executive Officer
Directors, Nominee, and Executive 14,944 10.42%
Officers as a group (12)
</TABLE>
- ---------------
*less than 1.0%
**in accordance with Louisiana law, not less than 133 shares will be purchased
upon initial election of any person as director.
ELECTION OF DIRECTORS
The number of directors to be elected at the meeting to constitute the Board of
Directors has been fixed at nine (9), each to be elected for a term of one year
and to serve until the next annual meeting of shareholders or until their
successors shall be elected and qualified. The enclosed form of Proxy confers
discretionary authority with respect to the election of directors, but no
authority under the Proxy will be exercised to vote for the election of any
person as a director,other than the persons named in this Proxy Statement who
have been nominated by the present Board of Directors, unless for some reason
not presently known, one or more of such nominees should become unavailable. In
such event, it is intended that the Proxy would be voted for a substitute
nominee or nominees who would be designated by the Board of Directors prior to
the shareholders' meeting. In order to be elected a director, a nominee must
receive a plurality of the votes cast by the holders of Common Stock.
Of the nominees for director, Messrs. Dabadie, Doucet, Major, Muckelroy,
Olinde, Orillion and Roy are present directors of Bancshares. Mr. Soprano has
not previously served as a director of Bancshares. The name and age, principal
occupation or employment, and other data regarding each nominee, based on
information received from the respective nominees, are set forth below:
Joseph L. Dabadie, Jr., age 73, has been a director since 1993. Mr. Dabadie
retired from the U.S. Army in 1988 with the rank of Brigadier General, and since
his retirement has worked as a safety director for Reliable Production, Inc.
Dr. Donald Doucet, age 43, has been serving as a director since 1998. Dr.
Doucet has been a practicing physician since 1985 and specializes in Internal
Medicine.
Craig A. Major, age 52, has been a director since 1993. Mr. Major has been
a cattle rancher for over twenty five years. Mr. Major oversees various family
real-estate investments, as well as his own.
Sylvester Muckleroy, age 74, has been serving as a director since 1998. Mr.
Muckleroy retired from the Pointe Coupee Parish School Board in 1988. Mr.
Muckleroy is the Mayor of the City of New Roads and is currently serving his
second term.
H.T. Olinde, Jr, age 71, was a founder of Guaranty Bank in 1957 and serves
as Chairman of the Board. Mr. Olinde served as a director from 1957 until his
resignation in 1984 and was re-elected director in 1993 and has been serving
since that time. Mr. Olinde is a shareholder and executive officer of B. Olinde
& Sons, Inc., which owns and operates retail furniture stores, a wholesale beer
distributorship, and various property interests.
<PAGE> 6
J. Layne Orillion, age 55, has been a director since 1993. Mr. Orillion is
President and owner of Lo-Vac, Inc., which he founded in 1982. F. Gregory Roy,
age 48, has been a director since 1993. Mr. Roy has been a 50% owner of P & G
Farms, Inc. and has been in farming business since 1978.
Michael Chad Soprano, age 35, is a nominee for director in 1999. Mr.
Soprano has been the owner and operator of Soprano's Grocery in Livonia,
Louisiana since 1997.
The foregoing directors of Bancshares are also directors of Guaranty Bank.
Additional directors of Guaranty Bank are J. Wade O'Neal, III; see discussion of
"Executive Officers" below.
EXECUTIVE OFFICERS
The executive officers of Guaranty Bank are as follows:
Beverly B. David, age 56, has served as Senior Vice-President since May
1999 and Head of Bank Operations since 1989. Mrs. David also serves as Cashier
and Security Officer, and as an Assistant Treasurer of Bancshares.
Mark Major, age 44, has been employed at Guaranty Bank since March 1998
when he was hired as an Agricultural Lender. Mr. Major has been employed in the
banking business for 13 years. He has served as Head of Lending and Compliance
Officer since 1999.
J. Wade O'Neal, III, age 43, has served as President and Chief Executive
Officer and as a Director of Guaranty Bank since May 1999. He has been employed
by Guaranty Bank for nineteen years in various aspects of the lending functions.
Mr. O'Neal also serves as Treasurer and Authorized Representative of Bancshares.
Mary Ann Pourciau, age 44, has served as Vice President since February 1998
and Marketing and Human Resources Officer since 1995. She has been employed by
Guaranty Bank for 23 years. She also serves as Secretary to the Board of
Guaranty Bank, and is an Assistant Treasurer of Bancshares.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Various directors and executive officers of Guaranty Bank and Bancshares,
and their respective family members and affiliated firms were customers of and
have had transactions with Guaranty Bank during the past two years in the
ordinary course of business. Similar transactions may be expected to take place
in the ordinary course of business in the future. All outstanding loans and
commitments included in such transactions were made on substantially the same
terms, including interest rates and collateral, as those prevailing at the time
from comparable transactions with other persons and did not, in the opinion of
management, involve more than normal risks of collectibility or present other
unfavorable features.
Since the beginning of 1998, no transaction between Guaranty Bank or
Bancshares and any executive officer, director, nominee for director or holder
of more than 5%: of the common stock of Bancshares has involved an amount in
excess of $60,000 except as indicated below, for which transactions the
following information is provided: (i) name of the person; (ii) relationship to
Bancshares/Guaranty Bank; (iii)nature of the transaction and (iv) the amount
involved in the transaction.
(i) Craig A. Major; (ii) director of Bancshares; (iii) personal loans to or
endorsed by Mr. Major; (iv) a total of $40,000 outstanding at December 31, 1998,
with $30,000 in available commitments.
(i) J. Layne Orillion; (ii) director of Bancshares; (iii) loan and line of
credit commitment to affiliate companies; (iv) a total of $1,459 outstanding at
December 31, 1998 with $100,000 in available commitments; and a total of
$228,370 outstanding at December 31, 1999 with $87,000 in available commitment.
(i) F. Gregory Roy; (ii) director of Bancshares; (iii) loans and lines of
credit commitments to Mr. Roy and affiliated entities; (iv) a total of $445,488
outstanding at December 31, 1998, with $310,000.00 in available commitments;
and a total of $471,126 outstanding at December 31, 1999 with $245,000 in
available commitments.
(i) J. Wade O'Neal, III; (ii) president and Chief Executive Officer of
Guaranty Bank and authorized representative of Bancshares; (iii) loan
commitments to Mr. O'Neal; (iv)two loans of $200,000 and $121,326 respectively,
both of which were originated and paid out in 1999.
MEETINGS AND COMMITTEES
During the year ended December 31, 1999, twelve (12) regular meetings of
the Board of Directors were held. All nominees for re-election attended at least
75% of such meetings. Directors receive$150 per month for their service on the
Board of Directors and an additional $50.00 for each special meeting attended.
<PAGE> 7
The Board of Directors has no nominating, compensation or similar
committees performing such functions at this time. All current members of the
Board of Directors serve on the Audit Committee. The Audit Committee met one (1)
time in 1999. The function of the Audit Committee is to review the engagement of
the independent accountants; review with the independent accountants and
management, Bancshares policies and procedures with respect to internal
auditing, independent accounting and financial controls and review the reports
of the independent accountants upon completion of their audit.
EXECUTIVE COMPENSATION
Daniel R. Domingue, Jr. served as the authorized representative of
Bancshares and as President and Chief Executive Officer of Guaranty Bank until
his resignation in May 1999. He received aggregate cash compensation during the
three years ended December 31, 1999 as set forth in the Summary Compensation
Table below. J. Wade O'Neal, III was promoted to President and Chief Executive
Officer of Guaranty Bank in May of 1999. He also serves as authorized
representative of Bancshares. His aggregate cash compensation for 1999 is also
set forth below. No executive officer or employee of Bancshares or Guaranty Bank
earned aggregate compensation during any of the three years ended December 31,
1999 exceeding $100,000, except Daniel R. Domingue, Jr. in 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Name and Position Year Salary Bonus Other compensation
---- ------ ----- ------------------
<S> <C> <C> <C> <C>
Daniel R. Domingue, Jr. 1997 $75,000 $15,000 $10,990(1)
Former Guaranty Bank President and CEO 1998 $75,000 $10,000 $11,990(1)
1999 $31,731 2,885 5,279(2)
J. Wade O'Neal, III 1999 $67,315 4,702 3,662(2)
Guaranty Bank President and CEO
</TABLE>
- --------------------------
(1) Includes living allowance, 401 (k) matching contribution and incentive and
vacation compensation.
(2) Includes 401 (k) matching contribution and incentive and vacation
compensation.
401(k) Plan. Under Guaranty Bank's 401 (k) Plan, officers and employees may
make contributions to the Plan with pre-tax salary reductions. The Bank matches
contributions up to three (3%) percent of the contributing employee's gross
salary.
AUDITOR SERVICES
Bancshares consolidated financial statements for the year ended December
31, 1999, were audited by the firm of Postlethwaite & Netterville, such firm
chosen as Bancshares auditors until replaced by the Board of Directors. A
representative of such firm will not be present at the 2000 Annual Meeting of
Shareholders.
SHAREHOLDER PROPOSALS
Any shareholder's proposal to be considered by Bancshares for inclusion in
the 2001 Annual Meeting of Shareholders proxy material must be submitted in
accordance with applicable regulations of the Securities and Exchange Commission
and received by Bancshares at its principal executive offices no later than
December 31, 2000.
OTHER MATTERS
The Board of Directors knows of no other matters which may be properly or
are likely to be brought before the meeting. However, if any matters are
properly brought before the meeting, the persons named in the enclosed Proxy
will vote thereon as the Board of Directors recommends.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ F. GREGORY ROY
F. Gregory Roy, Secretary
New Roads, Louisiana
March 15, 2000
<PAGE> 8
GREAT GUARANTY BANCSHARES, INC.
NEW ROADS, LOUISIANA
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
[P&N LOGO]
<PAGE> 9
C O N T E N T S
<TABLE>
<CAPTION>
Page
----
<S> <C>
INDEPENDENT AUDITORS' REPORT 1
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
December 31, 1999 and 1998 2 - 3
CONSOLIDATED STATEMENTS OF INCOME
Years ended December 31, 1999, 1998 and 1997 4 - 5
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
Years ended December 31, 1999, 1998 and 1997 6 - 7
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended December 31, 1999, 1998 and 1997 8 - 9
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 10 - 31
</TABLE>
[P&N LOGO]
<PAGE> 10
[POSTLETHWAITE & NETTERVILLE LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of
Great Guaranty Bancshares, Inc.
New Roads, Louisiana
We have audited the accompanying consolidated statements of financial condition
of Great Guaranty Bancshares, Inc. and Subsidiary as of December 31, 1999 and
1998, and the related consolidated statements of income, changes in
stockholders' equity and cash flows for each of the years during the three year
period ended December 31, 1999. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Great Guaranty
Bancshares, Inc. and Subsidiary as of December 31, 1999 and 1998, and the
results of its operations and its cash flows for each of the years during the
three year period ended December 31, 1999 in conformity with generally accepted
accounting principles.
/s/ POSTLETHWAITE & NETTERVILLE
Baton Rouge, Louisiana
February 11, 2000
-1-
<PAGE> 11
GREAT GUARANTY BANCSHARES, INC.
NEW ROADS, LOUISIANA
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
DECEMBER 31, 1999 AND 1998
A S S E T S
<TABLE>
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
Cash and due from banks $ 2,161,137 $ 2,194,636
Interest-bearing deposits with banks 792,408 2,175,631
Investment securities
available-for-sale 10,460,361 14,516,280
Investments in restricted equity securities 239,600 227,100
Loans receivable, net of allowance for loan losses
of $333,364 and $273,524, respectively 25,572,115 21,896,375
Accrued interest receivable 369,234 301,585
Premises and equipment, net 474,303 572,214
Other assets 35,035 87,042
----------- -----------
TOTAL ASSETS $40,104,193 $41,970,863
=========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
-2-
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<PAGE> 12
L I A B I L I T I E S A N D S T O C K H O L D E R S' E Q U I T Y
<TABLE>
<CAPTION>
1999 1998
------------ ------------
<S> <C> <C>
LIABILITIES
Demand deposits $ 5,922,179 $ 6,162,018
NOW deposits 6,288,966 6,400,995
Savings deposits 6,935,700 7,714,140
Time deposits, $100,000 and over 2,785,184 1,991,493
Other time deposits 14,136,991 14,953,003
------------ ------------
Total deposits 36,069,020 37,221,649
Notes payable 926,953 1,055,227
Accrued expenses and other liabilities 180,147 241,600
Federal funds purchased and securities sold
under agreements to repurchase -- 600,000
Dividends payable 35,843 35,843
------------ ------------
Total liabilities 37,211,963 39,154,319
------------ ------------
COMMITMENTS AND CONTINGENCIES -- --
STOCKHOLDERS' EQUITY
Preferred stock-Series A, no par; 500,000 shares authorized;
-0- shares issued and outstanding -- --
Preferred stock-Series B, no par; 2,000,000 shares authorized;
-0- shares issued and outstanding -- --
Common Stock - $7.50 par value, 500,000 shares
authorized; 143,374 shares issued and outstanding 1,075,305 1,075,305
Additional paid-in capital 2,411,471 2,411,471
Accumulated deficit (384,838) (702,553)
Accumulated other comprehensive income (209,708) 32,321
------------ ------------
Total stockholders' equity 2,892,230 2,816,544
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 40,104,193 $ 41,970,863
============ ============
</TABLE>
-3-
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<PAGE> 13
GREAT GUARANTY BANCSHARES, INC.
NEW ROADS, LOUISIANA
PAGE 1 OF 2
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
1999 1998 1997
----------- ----------- -----------
<S> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans $ 2,243,567 $ 2,048,586 $ 1,925,791
Interest on investment securities 756,025 824,878 1,185,028
Interest on federal funds sold 26,657 107,007 35,485
Interest on deposits with banks 79,995 91,473 29,856
----------- ----------- -----------
Total interest income 3,106,244 3,071,944 3,176,160
----------- ----------- -----------
INTEREST EXPENSE
Interest on deposits 1,081,152 1,115,603 1,072,050
Interest on notes payable 73,978 97,513 266,465
Interest on federal funds purchased
and securities sold under agreements to repurchase 5,837 1,459 17,141
----------- ----------- -----------
Total interest expense 1,160,967 1,214,575 1,355,656
----------- ----------- -----------
NET INTEREST INCOME 1,945,277 1,857,369 1,820,504
Provision (credit) for loan losses 81,700 26,288 (14,500)
----------- ----------- -----------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 1,863,577 1,831,081 1,835,004
----------- ----------- -----------
NON-INTEREST INCOME
Service charges on deposit accounts 297,973 316,317 305,781
Other service charges and fees 25,402 19,461 22,229
Other income 2,537 1,200 22,869
----------- ----------- -----------
Total non-interest income 325,912 336,978 350,879
----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
-4-
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<PAGE> 14
GREAT GUARANTY BANCSHARES, INC.
NEW ROADS, LOUISIANA
PAGE 2 OF 2
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
<TABLE>
<CAPTION>
1999 1998 1997
---------- ---------- ----------
<S> <C> <C> <C>
NON-INTEREST EXPENSE
Salaries and employee benefits $ 855,473 $ 899,954 $ 914,462
Occupancy expense 205,143 219,859 234,281
Data processing fees 110,953 114,369 103,215
Legal fees 78,739 16,885 103,254
Other expense 379,408 388,812 383,487
---------- ---------- ----------
Total non-interest expense 1,629,716 1,639,879 1,738,699
---------- ---------- ----------
INCOME BEFORE TAXES AND EXTRAORDINARY ITEM 559,773 528,180 447,184
Income tax expense 206,215 183,649 131,215
---------- ---------- ----------
INCOME BEFORE EXTRAORDINARY ITEM 353,558 344,531 315,969
EXTRAORDINARY ITEM
Gain on forgiveness of debt (net of income tax of $294,953) -- -- 1,922,752
---------- ---------- ----------
NET INCOME 353,558 344,531 2,238,721
Premium paid on redemption of preferred stock -- -- 62,359
---------- ---------- ----------
NET INCOME AVAILABLE FOR COMMON
SHAREHOLDERS $ 353,558 $ 344,531 $2,176,362
========== ========== ==========
PER COMMON SHARE DATA:
Income before extraordinary item $ 2.47 $ 2.40 $ 1.77
Extraordinary item -- -- 13.41
---------- ---------- ----------
NET INCOME PER COMMON SHARE $ 2.47 $ 2.40 $ 15.18
========== ========== ==========
CASH DIVIDENDS PER SHARE $ 0.25 $ 0.25 $ --
========== ========== ==========
Average shares outstanding 143,374 143,374 143,374
========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
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<PAGE> 15
GREAT GUARANTY BANCSHARES, INC.
NEW ROADS, LOUISIANA
CONSOLIDATED STATEMENTS OF CHANGES
IN STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
Preferred Stock
------------------------------------------------
Series A Series B
---------------------- ----------------------
Shares Amount Shares Amount
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1996 24,462 $ 126,037 21,559 $ 111,080
Comprehensive income:
Net income -- -- -- --
Net change in unrealized gain (loss) on securities
available-for-sale, net of taxes of $19,866 -- -- -- --
Comprehensive income -- -- -- --
Redemption of preferred stock
at premium (24,462) (126,037) (21,559) (111,080)
Dividends declared -- -- -- --
--------- --------- --------- ---------
BALANCE, DECEMBER 31, 1997 -- -- -- --
Comprehensive income:
Net income -- -- -- --
Net change in unrealized gain (loss) on securities
available-for-sale, net of taxes of ($2,663) -- -- -- --
Comprehensive income -- -- -- --
Dividends declared -- -- -- --
--------- --------- --------- ---------
BALANCE, DECEMBER 31, 1998 -- -- -- --
Comprehensive income:
Net income -- -- -- --
Net change in unrealized gain (loss) on securities
available-for-sale, net of taxes of ($124,681) -- -- -- --
Comprehensive income -- -- -- --
Dividends declared -- -- -- --
--------- --------- --------- ---------
BALANCE, DECEMBER 31, 1999 -- $ -- -- $ --
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
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<PAGE> 16
<TABLE>
<CAPTION>
Accumulated
Common Stock Additional Other Total
------------------------ Paid-in Accumulated Comprehensive Stockholders'
Shares Amount Capital Deficit Income Equity
--------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1996 143,374 $ 1,075,305 $ 2,411,471 $ (3,151,760) $ (1,072) $ 571,061
------------
Comprehensive income:
Net income -- -- -- 2,238,721 -- 2,238,721
Net change in unrealized gain (loss) on
securities available-for-sale, net of
taxes of $19,866 -- -- -- -- 38,563 38,563
------------
Comprehensive income -- -- -- -- -- 2,277,284
------------
Redemption of preferred stock
at premium -- -- -- (62,359) -- (299,476)
Dividends declared -- -- -- (35,843) -- (35,843)
--------- ------------ ------------ ------------ ------------ ------------
BALANCE, DECEMBER 31, 1997 143,374 1,075,305 2,411,471 (1,011,241) 37,491 2,513,026
------------
Comprehensive income:
Net income -- -- -- 344,531 -- 344,531
Net change in unrealized gain (loss) on
securities available-for-sale, net of
taxes of ($2,663) -- -- -- -- (5,170) 5,170
------------
Comprehensive income -- -- -- -- -- 339,361
------------
Dividends declared -- -- -- (35,843) -- (35,843)
--------- ------------ ------------ ------------ ------------ ------------
143,374 1,075,305 2,411,471 (702,553) 32,321 2,816,544
------------
BALANCE, DECEMBER 31, 1998 -- -- -- 353,558 -- 353,558
Comprehensive income:
Net income -- -- -- -- (242,029) (242,029)
------------
Net change in unrealized gain (loss) on
securities available-for-sale, net of
taxes of ($124,681) -- -- -- -- -- 111,529
------------
Comprehensive income
-- -- -- (35,843) -- (35,843)
Dividends declared --------- ------------ ------------ ------------ ------------ ------------
143,374 $ 1,075,305 $ 2,411,471 $ (384,838) $ (209,708) # $ 2,892,230
BALANCE, DECEMBER 31, 1999 ========= ============ ============ ============ ============ ============
</TABLE>
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GREAT GUARANTY BANCSHARES, INC.
NEW ROADS, LOUISIANA
PAGE 1 OF 2
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
1999 1998 1997
----------- ----------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 353,558 $ 344,531 $ 2,238,721
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 110,633 118,517 121,111
Provision for loan losses 81,700 26,288 (14,500)
Deferred income tax expense 57,578 174,604 125,658
Extraordinary item -- -- (1,922,752)
Net amortization on investment premium\discounts 61,229 39,372 43,422
Stock dividends received (12,500) (12,900) (12,100)
Net gain on sale of other real estate (2,046) -- --
Net investment securities gains (491) -- (15,046)
(Increase) decrease in accrued income and other assets (91,174) 9,093 124,672
Decrease in accrued expenses and other liabilities (61,453) (46,421) (33,019)
----------- ----------- -----------
Net cash provided by operating activities 497,034 653,084 656,167
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales/maturities/principal
paydowns of investment securities:
Available-for-sale 5,753,152 5,806,803 9,937,654
Purchase of investment securities
Available-for-sale (2,000,000) (6,089,990) (4,497,700)
Net change in:
Interest-bearing deposits with banks 1,383,223 (1,977,631) 1,090,571
Federal funds sold -- 1,125,000 (1,125,000)
Loans (3,757,440) 520,404 (5,604,855)
Purchase of equipment and building improvements (12,722) (48,032) (136,376)
Proceeds from sale of real estate 20,000 37,420 --
----------- ----------- -----------
Net cash provided by (used in) investing activities 1,386,213 (626,026) (335,706)
----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
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<PAGE> 18
GREAT GUARANTY BANCSHARES, INC.
NEW ROADS, LOUISIANA
PAGE 2 OF 2
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
1999 1998 1997
----------- ----------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES
Net decrease in non-interest-bearing
demand,savings, and NOW accounts $(1,130,308) $ (12,331) $ (236,777)
Net increase (decrease) in time deposits (22,321) 131,748 1,104,855
Payments on notes payable to banks -- (165,000) (2,935,000)
Payments on FHLB notes payable (128,274) (119,026) (110,453)
Net changes in federal funds purchased and
securities sold - repurchase agreement (600,000) 359,341 (459,431)
Redemption of preferred stock -- -- (299,476)
Dividends paid (35,843) (35,843) --
Settlement proceeds -- -- 2,217,705
----------- ----------- -----------
Net cash provided by (used in) financing activities (1,916,746) 158,889 (718,577)
----------- ----------- -----------
Net increase (decrease) in cash and cash equivalents (33,499) 185,947 (398,116)
Cash and cash equivalents - beginning of year 2,194,636 2,008,689 2,406,805
----------- ----------- -----------
Cash and cash equivalents - end of year $ 2,161,137 $ 2,194,636 $ 2,008,689
=========== =========== ===========
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest $ 1,229,141 $ 1,221,664 $ 1,409,434
=========== =========== ===========
Income taxes $ 142,000 $ 12,320 $ --
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
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<PAGE> 19
GREAT GUARANTY BANCSHARES, INC.
NEW ROADS, LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF BUSINESS
Great Guaranty Bancshares (the Company) is a bank holding company whose
principal activity is the ownership and management of its wholly-owned
subsidiary, Guaranty Bank and Trust (the Bank). The Bank generates
commercial (including agricultural), mortgage and consumer loans and
receives deposits from customers located primarily in Pointe Coupee Parish,
Louisiana, and the surrounding area. The Bank operates under a state bank
charter and provides full banking services. As a state bank, the Bank is
subject to regulation by the Louisiana Office of Financial Institutions and
the Federal Deposit Insurance Corporation.
The accounting and reporting policies of Great Guaranty Bancshares, Inc.
and Subsidiary conform to generally accepted accounting principles and the
prevailing practices within the banking industry. A summary of significant
accounting policies is as follows:
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiary, Guaranty Bank & Trust
Company. All significant intercompany accounts and transactions have
been eliminated in consolidation.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenue
and expenses during the reporting period. Actual results could differ
from these estimates.
The determination of the adequacy of the allowance for loan losses is
based on estimates that are particularly susceptible to significant
changes in the economic environment and market conditions. In
connection with the determination of the estimated losses on loans,
management obtains independent appraisals for significant collateral.
While management uses available information to recognize losses on
loans, further reductions in the carrying amounts of loans may be
necessary based on changes in local economic conditions. In addition,
regulatory agencies, as an integral part of their examination process,
periodically review the estimated losses on loans. Such agencies may
require the Bank to recognize additional losses based on their
judgments about information available to them at the time of their
examination. Because of these factors, it is reasonably possible that
the estimated losses on loans could change materially in the near
term. However, the amount of the change, if any, cannot be estimated.
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<PAGE> 20
GREAT GUARANTY BANCSHARES, INC.
NEW ROADS, LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
SIGNIFICANT GROUP CONCENTRATIONS
The Bank's loans are generally secured by specific items of collateral
including real property, consumer assets, and business assets.
Although the Bank has a diversified loan portfolio, a substantial
portion of its debtors' ability to honor their contracts is dependent
on regional economic conditions and conditions in the agricultural
industry.
INVESTMENT IN DEBT SECURITIES
All of the Bank's investments in debt securities are classified as
available-for-sale under Statement of Financial Accounting Standards
No. 115, "Accounting for Certain Debt and Equity Securities."
Declines in the fair value of individual securities below their cost
that are other than temporary result in write-downs of the individual
securities to their fair value. The write-downs are included in
earnings as realized losses as they occur.
Unrealized holding gains and losses, net of tax, on securities are
reported as a net amount in other comprehensive income.
Realized gains and losses on the sale of securities are determined
using the specific-identification method.
LOANS RECEIVABLE
The Bank grants mortgage, commercial and consumer loans to customers.
A substantial portion of the loan portfolio is represented by mortgage
loans throughout Pointe Coupee Parish. The ability of the Bank's
debtors to honor their contracts is dependent upon the real estate,
agricultural production and general economic conditions in this
immediate area and the surrounding area.
Loans that management has the intent and ability to hold for the
foreseeable future or until maturity or pay-off generally are reported
at their outstanding unpaid principal balances adjusted for
charge-offs, the allowance for loan losses, and any deferred fees or
costs on originated loans. Interest income is accrued on the unpaid
principal balance.
The accrual of interest on mortgage and commercial loans is
discontinued at the time the loan is 90 days delinquent unless the
credit is well-secured and in process of collection. Credit card loans
and other personal loans are typically charged off no later than 180
days past due. In all cases, loans are placed on nonaccrual or
charged-off at an earlier date if collection of principal or interest
is considered doubtful.
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<PAGE> 21
GREAT GUARANTY BANCSHARES, INC.
NEW ROADS, LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
LOANS RECEIVABLE (continued)
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.
ALLOWANCE FOR LOAN LOSSES
The allowance for loan losses is established as losses are estimated
to have occurred through a provision for loan losses charged to
earnings. 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.
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 for commercial and construction
loans 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.
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<PAGE> 22
GREAT GUARANTY BANCSHARES, INC.
NEW ROADS, LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
FORECLOSED REAL ESTATE
Real estate properties acquired through, or in lieu of, loan
foreclosure are to be sold and are initially recorded at the lower of
the loan value or fair value at the date of foreclosure. After
foreclosure, valuations are periodically performed by management and
the real estate is carried at the lower of carrying amount or fair
value less cost to sell. Revenue and expenses of the real estate and
changes in the valuation allowance are included in loss on foreclosed
real estate.
BANK PREMISES AND EQUIPMENT
Bank premises and equipment are stated at cost less accumulated
depreciation which is computed using either straight-line or
accelerated methods over the estimated useful lives of the assets,
which range from three to twenty years.
INCOME TAXES
Provisions for income taxes are based on taxes payable or refundable
for the current year (after exclusion of non-taxable income such as
interest on state and municipal securities) and deferred taxes on
temporary differences between the amount of taxable income and pretax
financial income and between the tax bases of assets and liabilities
and their reported amounts in the financial statements. Deferred tax
assets and liabilities are included in the financial statements at
currently enacted income tax rates applicable to the period in which
the deferred tax assets and liabilities are expected to be realized or
settled as prescribed in FASB Statement No. 109, Accounting for Income
Taxes. As changes in tax laws or rates are enacted, deferred tax
assets and liabilities are adjusted through the provision for income
taxes.
EARNINGS PER SHARE
Earnings per share are calculated on the basis of the weighted average
number of shares outstanding. Preferred stock dividends and premiums
paid for redemptions of preferred stock are deducted from net income
in performing the calculation.
COMPREHENSIVE INCOME
Comprehensive income is the change in stockholders' equity during the
period from transactions and other events and circumstances from
non-owner sources. Comprehensive income includes the change in
unrealized gains (losses), net of taxes, on available-for-sale
securities.
CASH AND CASH EQUIVALENTS
For purposes of reporting cash flows, cash and cash equivalents
include cash and balances due from banks, federal funds sold and any
other instrument with an original maturity of ninety days or less.
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<PAGE> 23
GREAT GUARANTY BANCSHARES, INC.
NEW ROADS, LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
OFF-BALANCE SHEET FINANCIAL INSTRUMENTS
In the ordinary course of business, the Bank has entered into
off-balance sheet financial instruments consisting primarily of
commitments to extend credit. Such financial instruments are recorded
in the financial statements when they are funded.
FAIR VALUES OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards (SFAS) 107, Disclosures
about Fair Value of Financial Instruments, requires disclosure of fair
value information about financial instruments, whether or not
recognized in the balance sheet. In cases where quoted market prices
are not available, fair values are based on estimates using present
value or other valuation techniques. Those techniques are
significantly affected by the assumptions used, including the discount
rate and estimates of future cash flows. In that regard, the derived
fair value estimates cannot be substantiated by comparison to
independent markets and, in many cases, could not be realized in
immediate settlement of the instruments from its disclosure
requirements. Accordingly, the aggregate fair value amounts presented
do not represent the underlying value of Bancshares.
The following methods and assumptions were used by Bancshares in
estimating its fair value disclosures for financial instruments:
Cash and Short-Term Instruments - The carrying amounts reported
in the balance sheets for cash and cash equivalents approximate
those assets' fair values.
Interest-bearing deposits in other banks - Fair values for
interest-bearing deposits in other banks are estimated using a
discounted cash flow analysis that applies interest rates
currently being offered on certificates to a schedule of
aggregated contractual maturities on such time deposits.
Investment Securities - Fair values for investment securities are
based on quoted market prices, where applicable. If quoted market
prices are not available, fair values are based on quoted market
prices of comparable instruments.
Loans Receivable - For variable-rate loans that re-price
frequently and have no significant change in credit risk, fair
values are based on carrying values. Fair values for certain
mortgage loans (e.g., one-to-four family residential), credit
card loans, and other consumer loans are based on quoted market
prices of similar loans sold in conjunction with securitization
transactions, adjusted for differences in loan characteristics.
Fair values for commercial real estate and commercial loans are
estimated using discounted cash flow analyses, using interest
rates currently being offered for loans with similar terms to
borrowers of similar credit quality. Fair values for impaired
loans are estimated using discounted cash flow analyses or
underlying collateral values, where applicable.
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<PAGE> 24
GREAT GUARANTY BANCSHARES, INC.
NEW ROADS, LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
FAIR VALUES OF FINANCIAL INSTRUMENTS (CONTINUED)
Deposit liabilities - The fair values disclosed for demand
deposits are, by definition, equal to the amount payable on
demand at the reporting date (that is, their carrying amounts).
The carrying amounts of variable-rate, fixed-term money market
accounts and certificates of deposit approximate their fair
values at the reporting date. Fair values for fixed-rate
certificates of deposit are estimated using a discounted cash
flow calculation that applies interest rates currently being
offered on certificates to a schedule of aggregated expected
monthly maturities on time deposits.
Short-term borrowings - The carrying amounts of federal funds
purchased, borrowings under repurchase agreements, and other
short-term borrowings maturing within 90 days approximate their
fair values. Fair values of other short-term borrowings are
estimated using discounted cash flow analyses based on the Bank's
current incremental borrowing rates for similar types of
borrowing arrangements.
Long-term debt - The fair values of the Company's long-term debt
are estimated using discounted cash flow analyses based on the
Company's current incremental borrowing rates for similar types
of borrowing arrangements.
Accrued interest - The carrying amount of accrued interest
payable approximates fair value.
Off-Balance Sheet Instruments - Fair values for off-balance sheet
lending commitments are based on fees currently charged to enter
into similar agreements, taking into account the remaining terms
of the agreements and the counterparties' credit standing.
RECLASSIFICATION
Certain amounts in the 1998 and 1997 financial statements have been
reclassified to conform with the current year presentation.
2. RESTRICTION ON CASH AND DUE FROM BANKS
The Bank is required to maintain reserve funds in cash or on deposit with
the Federal Reserve Bank. The required reserve at December 31, 1999 was
$217,000. The Bank customarily fulfills this requirement through
maintenance of sufficient levels of vault cash.
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<PAGE> 25
GREAT GUARANTY BANCSHARES, INC.
NEW ROADS, LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. INVESTMENT SECURITIES
Debt and equity securities consisted of the following:
<TABLE>
<CAPTION>
December 31, 1999
-----------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Available-for-Sale
U.S. Treasury & U. S. Agency $ 3,000,000 $ 155 $ (100,580) $ 2,899,575
Mortgage-backed securities 6,149,011 -- (217,314) 5,931,697
Agency for International
Development bonds 1,629,089 -- -- 1,629,089
------------ ------------ ------------ ------------
$ 10,778,100 $ 155 $ (317,894) $ 10,460,361
============ ============ ============ ============
Investments in Restricted
Equity Securities
Stock in Federal Home
Loan Bank, at cost $ 239,600 $ -- $ -- $ 239,600
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
December 31, 1998
-------------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Available-for-Sale
U.S. Treasury & U. S. Agency $ 3,000,000 $ 26,522 $ -- $ 3,026,522
Mortgage-backed securities 9,691,648 39,208 (16,759) 9,714,097
Agency for International
Development bonds 1,775,661 -- -- 1,775,661
------------ ------------ ------------ ------------
$ 14,467,309 $ 65,730 $ (16,759) $ 14,516,280
============ ============ ============ ============
Investments in Restricted
Equity Securities
Stock in Federal Home
Loan Bank, at cost $ 227,100 $ -- $ -- $ 227,100
============ ============ ============ ============
</TABLE>
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<PAGE> 26
GREAT GUARANTY BANCSHARES, INC.
NEW ROADS, LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. INVESTMENT SECURITIES (continued)
Gross realized gains and losses on sales of securities were as follows:
<TABLE>
<CAPTION>
Gains Losses
----- ------
<S> <C> <C>
1999 $ 491 $ --
1998 -- --
1997 18,863 3,823
</TABLE>
Investments in restricted equity securities consist of stock of the Federal
Home Loan Bank. These investments' fair values are based on the
recoverability of their par value. The Bank is required to maintain an
investment balance in FHLB stock equal to 5% of its outstanding advances
with the Federal Home Loan Bank (see Note 7). These investments are pledged
as collateral against borrowings from the FHLB.
The amortized cost and fair value of debt securities at December 31, 1999,
by contractual maturity, are shown below. Expected maturities may differ
from contractual maturities because borrowers may have the right to call or
prepay obligations with or without call or prepayment penalties.
<TABLE>
<CAPTION>
Amortized Fair
Cost Value
----------- -----------
<S> <C> <C>
Due in one year or less $ 500,000 $ 500,155
Due from one year to five years 3,819,528 3,711,398
Due from five years to ten years 1,698,990 1,629,470
Due after ten years 4,759,582 4,619,338
----------- -----------
$10,778,100 $10,460,361
=========== ===========
</TABLE>
For purposes of the maturity table, mortgage-backed securities, which are
not due at a single maturity date, have been allocated over maturity
groupings based on the weighted-average contractual maturities of
underlying collateral. The mortgage-backed securities may mature earlier
than their weighted-average contractual maturities because of principal
prepayments.
Investment securities with an approximate cost of $3,658,000 and $4,043,000
and an approximate fair value of $3,562,000 and $4,043,000 at December 31,
1999 and 1998, respectively, were pledged to secure public deposits and for
other purposes as required or permitted by law.
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<PAGE> 27
GREAT GUARANTY BANCSHARES, INC.
NEW ROADS, LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4. LOANS
The components of loans in the statements of condition at December 31, were
as follows:
<TABLE>
<CAPTION>
(In Thousands)
--------------------
1999 1998
-------- --------
<S> <C> <C>
Commercial $ 2,218 $ 1,783
Commercial real estate 2,310 1,755
Residential real estate 12,146 12,641
Consumer 2,568 2,712
Agricultural 6,663 3,279
Less: Allowance for loan losses (333) (274)
-------- --------
Loans, net $ 25,572 $ 21,896
======== ========
</TABLE>
An analysis of the change in the allowance for loan losses follows:
<TABLE>
<CAPTION>
1999 1998 1997
--------- --------- ---------
<S> <C> <C> <C>
Balance, beginning of year $ 273,524 $ 238,371 $ 254,819
Loans charged off (26,109) (5,778) (3,613)
Recoveries 4,249 14,643 1,665
Provision (credit) for loan losses 81,700 26,288 (14,500)
--------- --------- ---------
Balance, end of year $ 333,364 $ 273,524 $ 238,371
========= ========= =========
</TABLE>
Impairment of loans having recorded investments of $15,832 and $22,778 at
December 31, 1999 and 1998, respectively, has been recognized in conformity
with FASB Statement No. 114, as amended by FASB Statement No. 118. The
average recorded investment in impaired loans for 1999 and 1998 was
approximately $19,000 and $23,000, respectively. No allowance for loan loss
has been recognized on these loans due to collateral values exceeding the
loan values. The Bank is not committed to lend additional funds to debtors
whose loans have been modified.
Loans having aggregate carrying values of $15,830 and $17,954 were
transferred to foreclosed real estate as of December 31, 1999 and 1998,
respectively.
5. TIME DEPOSITS
At December 31, 1999, the scheduled maturities of time deposits are as
follows: (in thousands)
<TABLE>
<S> <C>
Within 3 months or less $ 7,002
Over 3 months through 12 months 9,110
Over 1 year through 5 years 810
-------
$16,922
=======
</TABLE>
-18-
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<PAGE> 28
GREAT GUARANTY BANCSHARES, INC.
NEW ROADS, LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6. PREMISES AND EQUIPMENT
Components of premises and equipment included in the statements of
condition at December 31, 1999 and 1998 were as follows:
<TABLE>
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
Cost:
Land $ 249,730 $ 249,730
Buildings 1,402,896 1,278,978
Furniture and equipment 541,498 692,884
----------- -----------
Total cost 2,194,124 2,221,592
Less: accumulated depreciation (1,719,821) (1,649,378)
----------- -----------
Net book value $ 474,303 $ 572,214
=========== ===========
</TABLE>
Depreciation expense amounted to $110,633, $118,517, and $121,111 for the
years ended December 31, 1999, 1998, and 1997, respectively.
7. NOTES PAYABLE
The Bank is eligible to borrow funds from the Federal Home Loan Bank under
an Advances, Collateral Pledge and Security Agreement dated April 20, 1994.
Under this agreement, the Bank can receive advances up to a maximum amount,
based on the value of collateral pledged as determined by FHLB guidelines.
Each advance has a fixed rate, determined as of the date of the advance and
a repayment term of 113-132 months. All advances are secured by a blanket
floating lien on all of the Bank's 1-4 residential single family first
mortgage loans, Federal Home Loan Bank stock and deposits with the Federal
Home Loan Bank.
Although eligible for advances, the Bank is no longer drawing funds under
this agreement, and did not make any draws during the three year period
ended December 31, 1999.
Scheduled future principal payments of advances outstanding as of December
31, 1999 are as follows:
<TABLE>
<S> <C>
2000 $143,277
2001 148,052
2002 159,568
2003 171,985
2004 157,000
Thereafter 147,071
--------
$926,953
========
</TABLE>
The weighted average interest rate of all advances outstanding as of
December 31, 1999 was 7.55%. Interest expense on these advances amounted to
$73,978, $83,227, and $91,786 for 1999, 1998, and 1997, respectively.
-19-
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<PAGE> 29
GREAT GUARANTY BANCSHARES, INC.
NEW ROADS, LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
8. INCOME TAXES
The Company and the subsidiary Bank file a consolidated income tax return.
The reasons for the differences between the statutory federal income tax
rates and the effective tax rates applied to income before income taxes and
extraordinary items are summarized as follows:
<TABLE>
<CAPTION>
1999 1998 1997
---------------- ---------------- -----------------
Amount % Amount % Amount %
--------- ---- --------- ---- --------- ----
<S> <C> <C> <C> <C> <C> <C>
Tax based on statutory rate $ 190,323 34.0% $ 179,581 34.0% $ 152,043 34.0%
Other 15,892 2.8 4,068 .8 (20,828) (4.7)
--------- ---- --------- ---- --------- ----
Effective tax rates $ 206,215 36.8% $ 183,649 34.8% $ 131,215 29.3%
========= ==== ========= ==== ========= ====
</TABLE>
In accordance with Statement of Financial Accounting Standards No. 109,
deferred income taxes are provided on the tax effect of changes in
temporary differences. Deferred tax assets are subject to a valuation
allowance if their realization is less likely than not. Deferred tax assets
(liabilities) which are included in accrued expenses and other liabilities
on the accompanying statements of condition are comprised of the following
at December 31:
<TABLE>
<CAPTION>
1999 1998
--------- ---------
<S> <C> <C>
Unrealized investment gains - available-for-sale $ -- $ (16,650)
Stock dividends received on investments (21,624) (17,374)
Allowance for loan losses (168,238) (196,169)
--------- ---------
Gross deferred tax liability (189,862) (230,193)
--------- ---------
Unrealized investment losses - available-for-sale $ 108,031 $ --
Net operating loss carryforward -- 38,240
Depreciation on premises and equipment 3,400 6,920
Business credit carryforwards and other -- 39,499
--------- ---------
Gross deferred tax asset 111,431 84,659
--------- ---------
Net deferred tax liability $ (78,431) $(145,534)
========= =========
</TABLE>
The consolidated provision for income taxes is summarized as follows:
<TABLE>
<CAPTION>
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Taxes payable currently $148,637 $ 9,045 $ 5,557
Deferred tax expense 57,578 174,604 125,658
-------- -------- --------
$206,215 $183,649 $131,215
======== ======== ========
</TABLE>
-20-
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<PAGE> 30
GREAT GUARANTY BANCSHARES, INC.
NEW ROADS, LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
9. RELATED PARTIES
Certain officers, directors, and their affiliates were indebted to the Bank
in the aggregate amounts of $ 1,514,964 and $1,260,208 at December 31, 1999
and 1998, respectively. During 1999 and 1998, $2,761,744 and $1,587,264 of
new loans and advances were made, and loan repayments totaled $2,506,988
and $1,706,874, respectively.
As of December 31, 1999, related party deposits were approximately
$1,450,000.
10. LEGAL CONTINGENCIES
The Company and its subsidiary are parties to litigation and claims arising
in the normal course of business. Management, after consultation with legal
counsel, believes that the liabilities, if any, arising from such
litigation and claims will not be material to the Company.
11. EXTRAORDINARY GAIN
In years prior to 1998, the Company had been a plaintiff in an action
seeking declaration of the amount due under promissory notes held by a
defendant creditor comprised of a group of individuals, including
stockholders of the Company. These notes evidenced advances originally made
to Great Guaranty Bancshares in 1987-88. In its reconventional demand, the
defendant sought judgment on the notes and, in the alternative, 90% of the
capital stock of the holding company in exchange for cancellation of the
notes. After trial on the merits in August 1994, the defendant's
alternative demand for delivery of holding company stock in exchange for
cancellation of indebtedness was denied, but judgment for approximately
$3.6 million was awarded against the holding company on the notes. The
trial court's judgment was appealed by both parties.
In 1995 the Company delivered to the defendants the judgment amount, with
reservation of all rights on appeal. In December 1996, the appellate court
modified the trial court's judgment and reduced the amount due to the
defendant to approximately $1.8 million.
In April 1997 the Supreme Court of Louisiana reviewed the appellate court's
ruling and re-affirmed.
The extraordinary gain recognized in the accompanying statement of income
results from the forgiveness of the debt equal to the unpaid principal
amount of the original notes payable plus accrued interest, less the amount
ultimately declared as payable to the holders of the notes. Also included
in the extraordinary gain is related interest income on the excess of the
delivery amount over the ultimate amount due to the defendant plus related
court costs.
The gain is tax effected to the extent of taxable amounts. Some of the gain
was applied retroactively, thereby utilizing tax benefits of previous years
that had previously expired. The tax effect of $294,953 consists of
amortization of deferred tax assets representing net operating losses
carried forward.
-21-
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<PAGE> 31
GREAT GUARANTY BANCSHARES, INC.
NEW ROADS, LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
12. REGULATORY MATTERS
The Bank is subject to various regulatory capital requirements administered
by the federal banking agencies. Failure to meet minimum capital
requirements can initiate certain mandatory and possibly additional
discretionary actions by regulators that, if undertaken, could have a
direct material effect on the Bank's financial statements. Under capital
adequacy guidelines and the regulatory framework for prompt corrective
action, the Bank must meet specific capital guidelines that involve
quantitative measures of the Bank's assets, liabilities and certain
off-balance sheet items as calculated under regulatory accounting
practices. The Bank's capital amounts and classification are also subject
to qualitative judgments by the regulators about components, risk
weightings, and other factors.
Quantitative measures established by regulation to ensure capital adequacy
require the Bank to maintain minimum amounts and ratios (set forth in the
table below) of total and Tier I capital (as defined in the regulations) to
risk-weighted assets (as defined), and of Tier I capital (as defined) to
average assets (as defined). Management believes, as of December 31, 1999,
that the Bank meets all capital adequacy requirements to which it is
subject.
As of December 31, 1999, the most recent notification from the Louisiana
Office of Financial Institutions categorized the Bank as well capitalized
under the regulatory framework for prompt corrective action. Categorization
criteria are based on maintenance of minimum total risk-based, Tier I
risk-based and Tier I leverage ratios as set forth in the following table
(in thousands):
<TABLE>
<CAPTION>
To Be Well
Capitalized Under
For Capital Prompt Corrective
Actual Adequacy Purposes: Action Provisions:
---------------- ------------------------------- ------------------------------
Amount Ratio Amount Ratio Amount Ratio
------ ----- ------ ------------------ ------ -------------------
<S> <C> <C> <C> <C> <C> <C>
As of December 31, 1999:
Total Capital
(to Risk Weighted Assets) $3,353 16.7% $1,609 > than or = to 8.0% $2,012 > than or = to 10.0%
Tier I Capital
(to Risk Weighted Assets) 3,101 15.4% 805 > than or = to 4.0% 1,207 > than or = to 6.0%
Tier I Capital
(to Average Assets) 3,101 7.5% 1,650 > than or = to 4.0% 2,062 > than or = to 5.0%
As of December 31, 1998:
Total Capital
(to Risk Weighted Assets) $ 2,983 15.6% $ 1,528 > than or = to 8.0% $1,911 > than or = to 10.0%
Tier I Capital
(to Risk Weighted Assets) 2,745 14.4% 764 > than or = to 4.0% 1,146 > than or = to 6.0%
Tier I Capital
(to Average Assets) 2,745 6.5% 1,665 > than or = to 4.0% 2,081 > than or = to 5.0%
</TABLE>
-22-
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<PAGE> 32
GREAT GUARANTY BANCSHARES, INC.
NEW ROADS, LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
13. RESTRICTIONS ON DIVIDENDS
Federal and state banking regulations place certain restrictions on
dividends paid by the Bank. The total amount of dividends which may be paid
at any date is generally limited to current year's net profits plus the
prior year's retained net profits. The Bank can declare without the
approval of the Commissioner, dividends totaling $278,059 more than its
retained net earnings during the year ending December 31, 2000.
In addition, dividends paid by the Bank to the Company would be prohibited
if the effect thereof would cause the Bank's capital to be reduced below
applicable minimum capital requirements.
14. EMPLOYEE BENEFITS
The Bank maintains a 401(k) plan for its employees, which allows them to
make contributions to the plan with pre-tax salary reductions. The Bank
matches contributions dollar for dollar up to three percent of employees'
gross salary. Contributions to the plan were $23,346, $23,453 and $23,809
for 1999, 1998, and 1997, respectively.
15. OFF-BALANCE SHEET ACTIVITIES
Credit-Related Financial Statements. The Bank is a party to credit related
financial instruments with off-balance-sheet risk in the normal course of
business to meet the financing needs of its customers. These financial
instruments include commitments to extend credit, standby letters of credit
and commercial letters of credit. Such commitments involve, to varying
degrees, elements of credit and interest rate risk in excess of the amount
recognized in the consolidated balance sheets.
The Bank's exposure to credit loss is represented by the contractual amount
of these commitments. The Bank follows the same credit policies in making
commitments as it does for on-balance-sheet instruments.
At December 31, 1999, the following financial instruments were outstanding
whose contract amounts represent credit risk:
<TABLE>
<S> <C>
Unfunded commitments under lines of credit $3,484,245
Credit card arrangements 406,339
</TABLE>
Commitments to extend credit are agreements to lend to a customer as long
as there is no violation of any condition established in the contract.
Commitments generally have fixed expiration dates or other termination
clauses and may require payment of a fee. The commitments for equity lines
of credit may expire without being drawn upon. Therefore, the total
commitment amounts do not necessarily represent future cash requirements.
The amount of collateral obtained, if it is deemed necessary by the Bank,
is based on management's credit evaluation of the customer.
-23-
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<PAGE> 33
GREAT GUARANTY BANCSHARES, INC.
NEW ROADS, LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
15. OFF-BALANCE SHEET ACTIVITIES (continued)
Unfunded commitments under commercial lines-of-credit, revolving credit
lines and overdraft protection agreements are commitments for possible
future extensions of credit to existing customers. These lines-of-credit
may or may not be drawn upon to the total extent to which the Bank is
committed. Future draws on lines of credit are subject to the same
collateral, terms and other conditions as draws which have been funded to
date.+
Commercial and standby letters-of-credit are conditional commitments issued
by the Bank to guarantee the performance of a customer to a third party.
Those letters-of-credit are primarily issued to support public and private
borrowing arrangements. Essentially all letters of credit issued have
expiration dates within one year. The credit risk involved in issuing
letters-of-credit is essentially the same as that involved in extending
loan facilities to customers. The Bank generally holds collateral
supporting those commitments if deemed necessary.
16. FAIR VALUE OF FINANCIAL INSTRUMENTS
The estimated fair values, and related carrying or notional amounts, of the
Bank's financial instruments are as follows:
<TABLE>
<CAPTION>
December 31, 1999 December 31, 1998
----------------- -----------------
Carrying Fair Carrying Fair
Amount Value Amount Value
-------- ------ -------- ------
(in thousands) (in thousands)
<S> <C> <C> <C> <C>
Financial assets:
Cash and due from banks,
interest-bearing deposits with
banks, and federal funds sold $ 2,954 $ 2,954 $ 4,371 $ 4,371
Securities available-for-sale 10,460 10,460 14,516 14,516
Restricted equity securities 240 240 227 227
Loans receivable 25,572 25,598 21,896 22,427
Accrued interest receivable 369 369 302 302
Financial liabilities:
Deposit liabilities 36,069 36,079 37,259 37,396
Short-term borrowings -- -- 600 600
Long-term debt 927 972 1,055 1,190
</TABLE>
-24-
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<PAGE> 34
GREAT GUARANTY BANCSHARES, INC.
NEW ROADS, LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
17. BANK ONLY FINANCIAL STATEMENTS
PAGE 1 OF 2
STATEMENTS OF FINANCIAL CONDITION
DECEMBER 31, 1999 AND 1998
A S S E T S
<TABLE>
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
Cash and due from banks $ 2,161,137 $ 2,194,636
Interest-bearing deposits with banks 792,408 2,175,631
Federal funds sold -- --
Investment securities - available-for-sale 10,460,361 14,516,280
Restricted investments in equity securities 239,600 227,100
Loans, net of allowance for loan losses 25,572,115 21,896,375
Properties and equipment, net 474,303 572,214
Accrued interest receivable 369,234 301,585
Other assets 35,035 87,042
----------- -----------
TOTAL ASSETS $40,104,193 $41,970,863
=========== ===========
</TABLE>
-25-
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<PAGE> 35
GREAT GUARANTY BANCSHARES, INC.
NEW ROADS, LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
17. BANK ONLY FINANCIAL STATEMENTS (continued)
PAGE 2 OF 2
STATEMENTS OF FINANCIAL CONDITION
DECEMBER 31, 1999 AND 1998
LIABILITIES AND STOCKHOLDER'S EQUITY
<TABLE>
<CAPTION>
1999 1998
------------ ------------
<S> <C> <C>
LIABILITIES
Demand deposits $ 5,958,992 $ 6,198,889
NOW deposits 6,288,966 6,400,995
Savings deposits 6,935,700 7,714,140
Time deposits, $100,000 and over 2,785,184 1,991,493
Other time deposits 14,136,991 14,953,003
------------ ------------
Total deposits 36,105,833 37,258,520
Notes payable 926,953 1,055,227
Accrued expenses and other liabilities 180,147 279,842
Federal funds purchased and securities sold
under agreements to repurchase -- 600,000
------------ ------------
Total liabilities 37,212,933 39,193,589
------------ ------------
COMMITMENTS AND CONTINGENT LIABILITIES -- --
STOCKHOLDER'S EQUITY
Common stock - $7.50 par value
Authorized - 200,000 shares; issued
and outstanding - 96,242 shares 721,815 721,815
Additional paid-in capital 5,201,524 5,123,569
Accumulated deficit (2,822,371) (3,100,431)
Accumulated other comprehensive income (209,708) 32,321
------------ ------------
Total stockholder's equity 2,891,260 2,777,274
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 40,104,193 $ 41,970,863
============ ============
</TABLE>
-26-
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<PAGE> 36
GREAT GUARANTY BANCSHARES, INC.
NEW ROADS, LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
17. BANK ONLY FINANCIAL STATEMENTS (continued)
Page 1 of 2
STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
1999 1998 1997
----------- ----------- -----------
<S> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans $ 2,243,567 $ 2,048,586 $ 1,925,791
Interest on investment securities 756,025 824,878 1,185,028
Interest on federal funds sold 26,657 107,007 35,485
Interest on deposits with banks 79,995 91,473 29,856
----------- ----------- -----------
Total interest income 3,106,244 3,071,944 3,176,160
----------- ----------- -----------
INTEREST EXPENSE
Interest on deposits 1,081,152 1,115,603 1,072,050
Interest on notes payable 73,978 83,227 91,786
Interest on federal funds purchased and securities
sold under agreements to repurchase 5,837 1,459 17,141
----------- ----------- -----------
Total interest expense 1,160,967 1,200,289 1,180,977
----------- ----------- -----------
NET INTEREST INCOME 1,945,277 1,871,655 1,995,183
Provision (credit) for loan losses 81,700 26,288 (14,500)
----------- ----------- -----------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 1,863,577 1,845,367 2,009,683
----------- ----------- -----------
NON-INTEREST INCOME
Service charges on deposit accounts 297,973 316,317 305,781
Other service charges and fees 25,402 19,461 22,229
Other income 2,537 1,200 22,869
----------- ----------- -----------
Total non-interest income 325,912 336,978 350,879
----------- ----------- -----------
</TABLE>
-27-
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<PAGE> 37
GREAT GUARANTY BANCSHARES
NEW ROADS, LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
17. BANK ONLY FINANCIAL STATEMENTS (CONTINUED)
PAGE 2 OF 2
STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
<TABLE>
<CAPTION>
1999 1998 1997
---------- ---------- ----------
<S> <C> <C> <C>
NON-INTEREST EXPENSES
Salaries and employee benefits $ 855,473 $ 899,954 $ 914,462
Occupancy expense 205,143 219,859 234,281
Data processing fees 110,953 114,369 103,215
Legal fees 6,451 8,624 20,534
Other expense 359,134 374,934 358,121
---------- ---------- ----------
Total non-interest expense 1,537,154 1,617,740 1,630,613
---------- ---------- ----------
INCOME BEFORE TAXES 652,335 564,605 729,949
Income tax expense 245,930 193,849 223,992
---------- ---------- ----------
NET INCOME $ 406,405 $ 370,756 $ 505,957
========== ========== ==========
</TABLE>
-28-
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<PAGE> 38
GREAT GUARANTY BANCSHARES, INC.
NEW ROADS, LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
18. PARENT ONLY FINANCIAL STATEMENTS
CONDENSED STATEMENTS OF FINANCIAL CONDITION
DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
ASSETS
1999 1998
----------- -----------
<S> <C> <C>
Cash in subsidiary bank $ 36,813 $ 36,872
Investment in subsidiary 2,891,260 2,777,274
Deferred tax asset -- 38,241
----------- -----------
Total Assets $ 2,928,073 $ 2,852,387
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accrued dividends payable $ 35,843 $ 35,843
----------- -----------
Total Liabilities 35,843 35,843
----------- -----------
Preferred stock - Series A, no par; 500,000 shares authorized;
-0- shares issued and outstanding -- --
Preferred stock - Series B, no par; 2,000,000 shares authorized;
-0- shares issued and outstanding -- --
Common stock - $7.50 par value; 500,000 shares
authorized; 143,374 shares issued and outstanding 1,075,305 1,075,305
Additional paid-in capital 2,411,471 2,411,471
Accumulated deficit (384,838) (702,553)
Accumulated other comprehensive income (209,708) 32,321
----------- -----------
Total Stockholders' Equity 2,892,230 2,816,544
----------- -----------
Total Liabilities and Stockholders' Equity $ 2,928,073 $ 2,852,387
=========== ===========
</TABLE>
-29-
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<PAGE> 39
GREAT GUARANTY BANCSHARES, INC.
NEW ROADS, LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
18. PARENT ONLY FINANCIAL STATEMENTS (CONTINUED)
CONDENSED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
Years ended December 31,
-----------------------------------------
1999 1998 1997
----------- ----------- -----------
<S> <C> <C> <C>
INCOME
Dividends received from Subsidiary Bank $ 128,343 $ 235,000 $ 1,521,865
----------- ----------- -----------
EXPENSES
Interest expense -- 14,286 174,679
Legal fees 72,287 8,260 82,721
Other expenses 20,273 13,878 25,365
----------- ----------- -----------
92,560 36,424 282,765
----------- ----------- -----------
INCOME BEFORE EQUITY IN
UNDISTRIBUTED EARNINGS
OF SUBSIDIARY 35,783 198,576 1,239,100
Equity in undistributed earnings
of subsidiary 278,060 135,755 (1,015,908)
----------- ----------- -----------
INCOME BEFORE TAXES AND
EXTRAORDINARY GAIN 313,843 334,331 223,192
Income tax expense (benefit) (39,715) (10,200) (92,777)
----------- ----------- -----------
INCOME BEFORE EXTRAORDINARY
GAIN 353,558 344,531 315,969
EXTRAORDINARY GAIN
(Net of income tax) -- -- 1,922,752
----------- ----------- -----------
NET INCOME $ 353,558 $ 344,531 $ 2,238,721
=========== =========== ===========
</TABLE>
-30-
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<PAGE> 40
GREAT GUARANTY BANCSHARES, INC.
NEW ROADS, LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
18. PARENT ONLY FINANCIAL STATEMENTS (CONTINUED)
CONDENSED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
Years ended December 31,
-----------------------------------------
1999 1998 1997
----------- ----------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 353,558 $ 344,531 $ 2,238,721
Adjustments to reconcile net income to
cash provided by operating activities:
Extraordinary item -- -- (1,922,752)
Equity in undistributed earnings
of subsidiary (278,060) (135,755) 1,015,908
Changes in operating assets and liabilities:
Accrued interest payable -- (3,267) (55,210)
Income tax benefit derived from tax
loss generated (39,714) (10,200) (92,777)
----------- ----------- -----------
Cash provided by operating activities 35,784 195,309 1,183,890
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on notes payable -- (165,000) (2,935,000)
Redemption of preferred stock -- -- (299,476)
Dividends paid (35,843) (35,843) --
Settlements received -- -- 2,217,705
Payments on amounts due subsidiary -- -- (127,134)
----------- ----------- -----------
Cash used in financing activities (35,843) (200,843) (1,143,905)
----------- ----------- -----------
Net increase (decrease) in cash (59) (5,534) 39,985
Cash - beginning of year 36,872 42,406 2,421
----------- ----------- -----------
Cash - end of year $ 36,813 $ 36,872 $ 42,406
=========== =========== ===========
Supplemental disclosure of cash flow information:
Cash paid for:
Interest $ -- $ 17,552 $ 229,889
=========== =========== ===========
Income taxes $ -- $ -- $ --
=========== =========== ===========
</TABLE>
-31-
[P&N LOGO]
<PAGE> 41
GREAT GUARANTY BANCSHARES, INC.
P. O. BOX 10
NEW ROADS, LOUISIANA 70760
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
THE UNDERSIGNED HEREBY APPOINTS H. T. OLINDE, JR. AND F. GREGORY ROY AS PROXIES,
EACH WITH THE POWER TO APPOINT HIS SUBSTITUTE, AND HEREBY AUTHORIZES THEM TO
REPRESENT AND TO VOTE, AS DESIGNED BELOW, ALL THE SHARES OF COMMON STOCK OF
GREAT GUARANTY BANCSHARES HELD OF RECORD BY UNDERSIGNED ON MARCH 12, 2000, AT
THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 10, 2000 OR ANY ADJOURNMENT
THEREOF.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, as executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or authorized officer. If a
partnership, please sign in partnership name by authorized person.
(PLEASE DATE AND SIGN ON REVERSE)
I PLAN TO ATTEND MEETING: [ ] YES [ ] NO
This proxy when properly executed will be voted in the manner directed herein by
the undersigned stockholder. If no direction is made, this proxy will be voted
for Proposals 1 and 2. Account Number: # of Shares
------- ------
<TABLE>
<S> <C>
1. ELECTION OF DIRECTORS: Joseph L. Dabadie, Dr. Donald Doucet,
FOR all nominees listed (except as marked to the contrary) Craig A. Major, Sylvester Muckleroy, H. T.
------ Olinde, Jr., J. Layne Orillion, F.Gregory
WITHHOLD AUTHORITY to vote for all nominees listed Roy, Chad Soprano. (Instruction: To
------- withhold authority to vote for any
2. In their discretion, the Proxies are authorized to vote upon such individual nominee, write that nominee's
other business as may properly come before the meeting. name(s) on the space provided below.)
For Against Abstain
-------- --------- --------- --------------------------------------------------------
Dated:
-----------------------------------------------------
Signature:
--------------------------------------------------
Signature if held jointly:
----------------------------------
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
</TABLE>
